Don’t agree with Hindenburg’s allegations on SEBI and Adani Group: Aswath Damodaran

Don't agree with Hindenburg's allegations on SEBI and Adani Group: Aswath Damodaran


New Delhi:

Regulators in India face challenges in taking timely decisions. This is the statement of renowned valuation expert Aswath Damodaran, who recently spoke in an interview with ET BFSI on the recent criticism of the market regulator regarding Hindenburg’s report on Adani Group. During this, he also said that he does not agree with Hindenburg’s allegations on Adani Group.

‘You have to pay the price for wrong decisions’

He said that the delay happened because in India when you are a bureaucrat, you do not get any benefit for taking decisions, but when you take a decision and it goes wrong, you have to suffer the consequences. In such a situation, what should they do? They keep postponing it. In earlier days, they used to take a big pile of files and send it to some senior officer, now a changed form of the same is being seen.

Disagree with Hindenburg’s allegations on Adani Group

After SEBI, the discussion turned towards the financial condition of the Adani Group, especially the controversial Hindenburg report and the allegations of financial irregularities made by it. Damodaran completely disagreed with the notion that the entire Adani Group lacked value. He said that ‘the entire Hindenburg report says that the entire Adani Group was a scam and had no value, whereas this is not true.’

He said that Adani Group is a capable infrastructure company of the country, India needs infrastructure on a large scale. Adani’s story is a part of India’s story and the fact is that Adani fulfills the need for infrastructure. So, Adani Group is moving ahead, they have big projects and hence they are borrowing money and are also doing it.

Adani Group’s debt is not a problem

On the issue of debt in the balance sheet of Adani Group, he says that Adani Group is in infrastructure projects and the cash flow is contractual which they can use to repay the debt. Infrastructure companies around the world take more debt than many other companies due to their characteristics, so am I worried whether they will go bankrupt? I don’t think so, they have the capacity to raise capital. But they should think about a healthy debt mix. They should think about equity, because now the prices have increased again so that they can reduce their debt share.



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