Many people from the corporate sector have expressed their views on the Hindenburg controversy. In a latest, Industrialist Anand Mahindra tweeted, “ Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force. I have lived long enough to see us face earthquakes, droughts, recessions, wars, and terror attacks. All I will say is: never, ever bet against India.
Mahindra’s statement has come in the backdrop of a report released by the US-based
Hindenburg Research, a short-seller firm, which has been in the controversies in the past for its controversial reports.
Notably, On January 24, Hindenburg released its report. Owing to this, Adani Enterprises Ltd’s stock fell from January 24 closing of Rs 3,442 to February 2 closing of Rs 1,565. The Company lost a value of around Rs. 2.4 lakh crore.
Despite setbacks, FPO worth Rs 20,000 crore by Adani Enterprises was over-subscribed on January 31, with heavy support from non-institutional investors. However, on February 2, 2023, the group decided to withdraw the FPO to considering investors’ future interest. In a video message, Gautam Adani of the Adani Group said the interest of his investors was paramount and everything else secondary.
Here, it is worth mentioning that Hindenburg Research is a short-seller firm that claims to specialise in forensic financial research. A ‘short’ trade is a way to make money if an investment’s price drops. When it releases its ‘research’, if the price of the target company’s stock or bond falls due to negative sentiment created by the report, Hindenburg can profit. Reports suggest Hindenburg has the backing of several investors and its core business operation is to make money through short trade. Its founder Nathan Andersen has targeted various companies earlier too and has faced castigation in the US courts.