La Mumbai Stock Exchange makes the first damage count after the monsoon from the West hit the Adani group, much worse, according to Bloomberg, of the tstorms Evergrande which still weighs on China's recovery today, three years later. But, big surprise, Western operators have not abandoned the Indian list. On the contrary. HindenburgResearch, the US fund that caused the Adani crisis, "the most spectacular scam in financial history", has spent a surprise New York Times to praise the Indian square, considered “the expression of a superpower from the future very promising". A singular message in the aftermath of the sudden fall of the conglomerate which collapsed in just seven days 112 billion dollars which involved many big names in big finance, from the ever-present Crédit Suisse to TotalEnergies, enticed by the dizzying rise of the empire of Gautan Adani, the son of a Gujarat cloth merchant who in twenty years managed to amass a wealth greater than that of Jeff Bezos. Except then collapse in front of the accusations of an analyst of Wall Street
New Delhi's GDP exceeds that of the UK
A real sting, in short. But that almost nothing seems to weigh on the financial appeal of Modi's land. Indeed:
- India is about to celebrate more than one overtaking this year. The New Delhi's GDP will surpass that of the UK. India's economy, which at the turn of the millennium represented just over one-twentieth the size of America's, today boasts a ratio of one to seven.
- Also within the year, India it will surpass China in number of inhabitants.
- All projects leadership in softwarewitnessed by the many Silicon Valley business leaders arriving from Bangalore (from Microsoft's number one Satya Nadella to Google's Sundar Pichai) plus the growth of auto sector. Renault is preparing to invest 600 million euros in the subcontinent where, alongside Suzuki and the local giants (Tata, Mahindra , already operated by Stellantis India became the third largest car market in the world.
- Narendra Modi tip for the fiscal year starting in April at a cGDP growth of +6,5%, by far among the highest in the globe and also in the context of developing economies, with a fiscal deficit at 5,9% and a 33% increase in capital expenditure. Objectives compatible with the growth of the defense industry (exports should rise five times over the next few years) and higher energy consumption, but also with the prudence of the central bank which, after a quarter point increase in interest rates, has already anticipated other upward moves.
- A policy that investors like: In terms of stock market performance, the rise of the country has translated in the last nine years in a gain for performance is expressed in Euros. An exceptional figure when compared with that of the main global indices. In terms of fundamentals, according to the updated references of Bloomberg, iThe Indian stock's average P/E is around 22,40x.
- The Indian Stock Exchange currently accounts for the third stock market in terms of specific weight in the emerging sector. Over the course of 2022, it overtook South Korea.
The Adani landslide is set to continue
These records, however, were put at risk by the misadventures of the conglomerate created by Adani which, after having more than halved the value of the seven listed companies in a few days, still boasts very inflated prices this morning: 141 times profits against 25 times for the competitor Reliance or 28 times for Apple- The landslide of the infrastructure giant, from ports to energy, dear to Prime Minister Modi is destined to continue for quite a while, after Hindenburg (already protagonist of formidable short on the US market) has Ponzi scheme exposed of the group: on one side a network of sghost company in tax havens (with the complicity of the Indian Conmsob) he raised the capital, on the other hand the money thus collected ended up in finance acquisitions of the group.
Adani, despite having no particular skills, was thus awarded the management of ports and airports, including a share of the most important airport, that of Mumbai. An unstoppable march, with a stellar performance (+3.000% in five years), but built on sand. as Hindenburg demonstrated, triggering a rain of sales. An ascent only possible with the support of Prime Minister Modi, also from Gujarat, who has supported Adani's rise for years. But, to the credit of the Hindu prime minister, so far there has been no attempt to save his friend and compatriot to the detriment of the market. Also because they are real crack victims are the Western groups, first of all Total Energy (37% strong in the Gas subsidiary, 25% in the one dedicated to renewables and more) together with Citi. On the contrary, he writes the New York Times, Indian Big Business does not cry tears over the fate of the upstart, already the second richest man in the world, who today sacrifices the billions earned to save what can be saved.
With the blessing of Nathan Anderson, the CEO of Hindenburg who authored an airtight 416-page report that demolished the clay bean group: the pen can do more damage than power.
