Swaminathan Aiyar on the Hindenburg report and Adani; And why are Khalistan supporters clashing with police in Punjab?

Market Watch

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Hindenburg report may be blessing in disguise for Gautam Adani, says economist Swaminathan Aiyar

Economist Swaminathan Aiyar has opined that billionaire Gautam Adani may have benefitted from the rout of Adani Group stocks after Hindenburg Research’s report on the conglomerate.

Who is Swaminathan Aiyar? Aiyar, a graduate of St. Stephen's College, University of Delhi and Magdalen College, University of Oxford is an economist, a journalist and a columnist.

The details: Aiyar said he thinks “the Hindenburg report may be the best thing that ever happened to Adani.”

• He explained that the scrutiny would force the Group to adopt financial discipline by slowing down its rapid expansion and diversification strategy, which carries great risks.
• The expert also pointed out that financiers would be forced to be more cautious when lending to Adani.
• “One day I might actually buy Adani shares,” Aiyar said, noting that he had not done so thus far due to “high prices and high risk.”

The other side: Aiyar however, also rubbished Opposition claims that Adani’s success came from corruption and cronyism, terming the businessman a “national champion”, a “strategic player” and someone who is “more than just a businessman.”

• He says “going from humble origins to global No. 3 in two decades is impossible without exceptional business skills.”
• He praised Adani’s business skills in turning the Mundra port, a “desert patch” lacking transport infrastructure, into India’s largest, and added that Adani had taken great risks by spending billions of dollars to secure power projects in Sri Lanka and the Haifa port in Israel.

Between the lines: The Hindenburg report has led to a bloodbath in Adani stocks, with companies of the group losing over Rs 12 lakh crore in market value in just a month. The total m-cap of all 10 Adani stocks has reduced by 62% to Rs 7.32 lakh crore in a month.

• Since the report came out, Adani has dropped from being the third richest person in the world to #29.
• The Life Insurance Corporation’s Rs 30,000 crore bet on the Adani Group has resulted in negative returns following the rout in the conglomerate’s stock prices.

Why are Khalistan supporters clashing with police in Punjab?

Hundreds of supporters of Khalistan sympathiser Amritpal Singh Sandhu - many armed with swords and guns - clashed with police and stormed into a police complex in Ajnala in Punjab’s Amritsar district, protesting against the arrest of one of his associates.

• Amritpal Singh - a self-proclaimed follower of pro-Khalistan slain militant Bhindranwale - is the leader of “Waris Punjab De” or heirs of Punjab, an organisation floated by late lawyer-actor-turned-activist Deep Sidhu in 2021.
• The organization reportedly seeks to help the youth of the state “follow the tenets of Sikhism” and “establish Khalsa Raj”.
• Amritpal reportedly also threatened Union Home Minister Amit Shah saying he would meet the same fate as former PM Indira Gandhi.

The details: Lovpreet Toofan, a close associate of Sandhu had been arrested on charges of kidnapping in a case in which Sandhu was also accused.

• Sandhu reportedly issued an ultimatum to the police demanding Lovepreet’s release. He was released today after a court accepted the police’s discharge application.

Between the lines: The incident has put the spotlight on the AAP government’s handling of internal security in Punjab. They have been accused of being “soft” on Khalistani elements in the state.

• The incident follows a similar one that happened in Mohali on February 8 which left 33 policemen injured.
• When Punjab Chief Minister Bhagwant Mann was recently asked questions about the incident and about “Waris Punjab De” he evaded them and instead spoke about mohalla clinics, schools, and steel plants.

ICYMI

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