Adani-Hindenburg row: Aswath Damodaran pin points this flaw in global eco system

Adani-Hindenburg row: Amid falling Adani group stock prices valuation guru Aswath Damodaran has pointed out a flaw in global economic system that opened a window of opportunity to Gautam Adani and his company. The finance professor said that ESG (environment, social and governance) in the global economic setting is far more deserving of the 'biggest con' label than Gautam Adani.

In his blog titled 'Musings on Markets', Aswath Damodaran wrote, "There is another seam or weakness in the global economic setting that Adani Enterprises exploited, and that is ESG, an acronym far more deserving of the "biggest con" label than Adani, since it is threatening to lay waster to trillions of dollars, not billions."

The valuation guru went on to add that if you review the Adani website and sales pitch, it is quite clear that the company learned to play the ESG game well, creating an entire ESG universe to underpin its companies, and exploiting the green bond market, presumably for its green energy business.

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Pointing towards emptiness of green bond premise in global economic settings, Aswath Damodaran said, "you review the Adani website and sales pitch, it is quite clear that the company learned to play the ESG game well, creating an entire ESG universe to underpin its companies, and exploiting the green bond market, presumably for its green energy business," adding, "In fact, if Adani happens to default on its debt, I hope that it starts with the green bond holders, since I cannot think of a group that deserves default more."

on 24th January 2023, US-based short seller Hindenburg Research raised concern over debt positioning of the Adani group companies that led to heavy beating in Adani group stocks. The short seller's report forced Chairman Gautam Adani to withdraw Adani Enterprises FPO (Follow-on Public Offer) even though ₹20,000 crore issue was fully subscribed. While announcing the withdrawal of Adani Enterprises FPO Chairman Gautam Adani said that the decision was taken to ensure safety of investors' money who stood with the company at such challenging times.

On 24th January 2023, Adani Enterprises share price had ended at ₹3,442 apiece and the FPO was offered at a price band of ₹3,112 to ₹3,276 per equity share. Adani Enterprises share price today is around ₹1,455 apiece levels, logging around 58 per cent in nine straight sessions.

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