Why the Adani rout is a ‘wake up call’ for the world
1 min read . Updated: 16 Feb 2023, 12:40 PM IST
PremiumThe turmoil triggered by short-seller Hindenburg is forcing everyone to get smarter about investing in India, and everywhere else.
This week’s In the City focuses on a story that’s transfixed the global finance community for weeks: the Adani-Hindenburg clash. Bloomberg Opinion columnist Shuli Ren and Executive Editor Sree Vidya Bhaktavatsalam join hosts David Merritt and Francine Lacqua for a comprehensive discussion of the fraud allegations and the fallout.
Aside from the obvious impact—Adani’s businesses lost $108 billion in a week—the crisis has shaken investor faith in India. Ren says that it’s acting as a “wake-up call for global investment banks and blue-chip credit funds."
“If you just look at Adani’s financing, half of the money came from international investors," she says. “While those of us in Asia knew about all of these allegations against Adani over the years, a lot of the investors in New York and London have been sleeping at the wheel." (The Adani Group has denied any wrongdoing.)
Ren and Bhaktavatsalam also discuss how short-sellers have emerged as the new auditors, and how that speaks to the need of a more robust regulatory regime—not just in India, but worldwide. But as some investors are watching with concern, others see opportunity. Bhaktavatsalam points out that HSBC is still betting big on India. She predicts we’ll likely see more skittish investors stepping back while those with a greater risk appetite jump in.
This story has been published from a wire agency feed without modifications to the text.