Comments by "Sankalp" (@sankalp6872) on "'Going ahead will not be morally correct' - Gautam Adani's video statement on cancelled FPO" video.

The right should NOT defend him. Adani CAN fight his own battles. The group's stock price was always overvalued. 400x PE is just INSANE. Price correction is actually good. The Hindenburg report is a POSITIVE. At the very least, it will improve scrutiny and enhance corporate governance in the Adani group. The Left's "celebration" is premature & schadenfreude. Unlike Kingfisher or Lanco Infra, Adani group is a positive cash flow business with a monopoly in some sectors. There are NO interest payment DEFAULTS, nor is any bank pushing for foreclosure. The loss in market capitalization is just shareholders cracking the whip. The perception of "closeness" with the ruling Govt must end for the group's better future.
29
@mast420kalandar Finally, some sane voice in the comment sections. The times we live in have thrown the "voice of reason" for a toss. Even intelligent people seem to be siding with stupidity because of their loyalty toward their ideologies. To be fair, Adani group's expansion slowing down would be a good thing. I don't mind if he borrows to build 10,000 ports (Group's core strength), but the acquisition of NDTV was QUESTIONABLE and & mismanagement of capital. Media has been bleeding money for quite some time, and NDTV was in heavy losses for the past many years. Even ACC and Ambuja weren't the best acquisitions, if you ask me. Going outside of your core puts you at unnecessary risk, and many of these acquisitions were happening at the same time. As a concerned shareholder, I would FLAG such transactions.
5
@anuragsood7997 Logic doesn't imply convergence of views. I don't like to extend discussions owing to the unfortunate agendas at play in our country. Nevertheless, my 50 paisa on your view is that while you are entitled to your "fetishes". Time shall reveal all. Dhirubhai Ambani, too, came under a similar scandal and survived. Of course, there are a much larger number of Ramalingam Rajus, Mallyas, Lanco Infra, Subroto Roys, and Venugopal Dhoots, which were a mix of bad management and fraud. I wouldn't wish ill upon anyone just because my political ideology will benefit from it. I hope Adani group and its stakeholders prosper.
3
@Surya_teja There are multiple things to consider here. Q1) Let's start with the basics. Nobody would acquire company X at its entire mcap of Y. For listed companies, 33%+ is enough for control (very loose definition. Just for a general sense. There are other qualifiers for control) & 50%+ is considered ownership. For, e.g., Promoter ownership in both of Adani's cement acquisitions is at 50% (ACC) and 65%(Ambuja) only. While you may not acquire firms at the MCAP, you still need to pay a hefty premium over the stock price (usually the case but not always, NDTV was actually acquired at a discount). So in the ACC-Ambuja case, Adani paid $10 Billion for companies whose entire MCAP does not exceed $15 billion. The extra amount paid over the share price goes as "Goodwill" in the balance sheet of Adani group acquiring it. This acquisition was financed using Bonds. So Adani group companies will have to repay money to these bondholders. This is not ACC or Ambuja's loan. They don't have to pay for their own acquisition. 2) In case X goes bankrupt, X's lenders will take over Y. It's the same thing as normal foreclosures. If somebody doesn't pay their loan, banks take possession of their assets like a house, car, etc. X being a health company, will be reauctioned and sold again. I sense your troubles. It has been repeatedly flagged that the Adani group is expanding too fast. Ambuja & ACC are safe, and it has been clarified today that Adani group has not pledged their shares for any other loans (If they had, it would have been a massive fraud because they are already given as collateral somewhere else). IMO, the NDTV acquisition is a total waste of money. Media hasn't been generating money anywhere in the world. Streaming services have bruised them badly. The Hindenburg Report is good and timely. It will slow down Adani's expansion and will revert them to focus on their core businesses. Lastly, with all due respect, "But is there any company in the world that can grow indefinitely and exponentially?" is a flawed question. "Going Concern" and "Business entity" are among the two fundamental assumptions in accounting. Accountants always assume that the firm will continue in perpetuity. In fact, if there is reason to believe that this assumption might not hold, Auditors are morally bound to disclose it in the audit report. As to exponential growth, there will always be periods of slack and rapid rise. Overall, Many firms, like Microsoft, Apple, etc., have delivered year-after-year growths. But even they are at a price multiple of close to 30. Before this scandal, Adani was at 400. It was never sustainable. According to my valuation, the share price of Adani should not be more than Rs 900, so a lot more correction is required. PS: As a side note, Adani's debts, while high cumulatively, are within manageable limits based on ratio indicators). Only Adani Green, which has a debt-to-equity ratio of over 2, is at a dangerous level. nevertheless, in absolute terms, it's just one cheque from Mr. Adani.
2