A giant Indian conglomerate couldn’t stop the freefall in its shares and bonds set off by an American short seller in what has grown into a bitter fight over the empire created by one of India’s richest and most politically connected businesspeople.
Adani Group, an energy and infrastructure company, released its 413-page rebuttal to the short seller’s claims just as the trading week began in Asia. Investors weren’t convinced and dumped shares of the company on Monday, bringing the total value lost to $64 billion since last week.
The fight could have wide implications for India’s power industry and for its transition to clean energy. It has also caused billions of dollars in losses for Indian investors who have helped drive up the company’s share price to stratospheric levels.
Most large companies hire credible, well-known external auditing firms in order to give investors confidence that their financials are being independently reviewed by a capable team.
Given the complexity of Adani Total Gas and, particularly, Adani Enterprises, with 156 subsidiaries and many more affiliates and joint ventures, one would expect a large, highly experienced team to be monitoring its labyrinthian corporate structure.
But Adani Group has apparently shunned this approach, choosing a tiny auditor named Shah Dhandharia to oversee the audits for these two public companies.
Shah Dhandharia’s website has gone offline during our investigation and now appears to have no website. Archived versions of the website as of February 2020 show that the firm was comprised of only 4 audit partners and 7 support staff.
Of the partners featured on its team page, we found that 3 were in their 20s – hardly the level of experience or seniority needed to seriously scrutinize one of the world’s wealthiest and most powerful businessmen.
Apparently, the Adani group has a 413-page rebuttal to the short-sellers. Rebuttals often take more time/space…but I not going to lie, I am not surprised at the length here…
(though some short-sellers have done sketchy things, my own view is short-sellers are an essential part of af functioning market and discourage crony-capitalism)
A potential watershed event in India’s modern economic history passed by recently. A state of the art, globally recognized, electronic product is to be made in India for export to the world.
Apple announced plans to make its latest phone model – iPhone 14 – in India, a significant milestone in the company’s strategy to diversify manufacturing outside of China.
Five percent of iPhone 14 production is expected to shift to the country this year, much sooner than analysts had anticipated.
While Apple is big, a more telling example of India’s potential is at the end of this post. But before that, how did India, a country that struggled to feed itself in the 1950s, get into the running for ‘factory of the world’ ?
In 1950, less than 1% of Indian college students studied science and engineering. By 2022, this number had risen to more than 30%. In fact, science and engineering have become so popular in India today, that a counter culture has arisen in the form of movies like 3 Idiots. Back in 1950, India’s best students were focused on subjects like law and social sciences, primed to manage the Empire. In fact, some have remarked that the independence movement was a result of the British producing too many lawyers in India.
Since independence, a concerted effort has been made by the Indian state to popularize science and engineering. This was done under the aegis of spreading a ‘scientific temper’, starting with the establishment of Vigyan Mandir in 1953. Subsequently, following in the legacy of medieval India’s Jantar Mantars, Nehru planetariums were established in major Indian cities. Further, the establishment of the IIT system gave a formal structure and high standard to engineering education. In 1976, the cultivation of scientific temper was included as a fundamental duty in the Constitution.
By the late 1970s, India’s growing pool of scientists and engineers had attracted attention from abroad, specifically Japanese automakers. This resulted in a dramatic increase in India’s automobile production, more than doubling from 700,000 to 2 million in the 1980s.An entire ecosystem of vendors producing automobile components came up around Suzuki’s Gurgaon factory. It is perhaps surprising that the Indian government did not think about replicating this success in the electronics sector. This oversight turned out to be an enormous missed opportunity.
The post 1990 period saw an acceleration in India’s economic growth, with the software and IT sector taking a prime position both in the export numbers and the economic narrative. However, India was a manufacturing star as well, particularly its pharma, petrochemical and automobile industries.
However, its potential in the wider manufacturing arena remained unrealized and indeed unrecognized. The late 2010s produced new exigencies in the global order, with Western countries trying to pivot away from their dependence on China. In this process, India has emerged as the only real alternative to achieve the technical complexity and economies of scale demanded by modern industry.
An equally important turn of events has been the precipitous decline in India-China relations. If Chinese support for Pakistan had made Indians wary of the CCP, its direct clashes with India on the border have made China enemy number one in the Indian public’s eye. There is a determination at the political and public level to not depend on Chinese manufacturing imports. This mark has already been achieved for toys, cell phones and PPE. Make no mistake, India wants to bring Chinese imports down to zero. This is what ‘Atma Nirbhar Bharat’ (self reliant India) really means.
On the other hand, Western business seems keen to move out of China. The LA Times describes the experience of one European manufacturer to move away from China,
In 2019, he began assessing the possibility of moving some manufacturing capabilities to Vietnam. But he abandoned the plan eight months later after price increases for about half of the company’s projects upset his customers. Product development also took longer — one prototype that would have been completed in three weeks in China required six months in Vietnam.
A review of other countries in Southeast Asia proved even less fruitful, he said.
By late 2020, Gaussorgues turned farther afield — to India. The local electronics and automotive ecosystem offered lower manufacturing costs and easy access to parts. With five employees so far, he aims to start assembly work next year, and hopes to host the majority of manufacturing there after five years.
What is important to note here is that India being able provide an alternative to China is not about the population. SE Asia, where the person in the article first when to has enormously populated countries, all with fantastic port access. India is able to provide an alternative because of the consistent emphasis on science and technology education over the past 70 years.
What are the broader takeaways from the apparent success of India trained CEOs in the US ? The usual Darwinian (best and brightest) or ‘sheer population’ arguments are attractive but dont withstand scrutiny. A broader explanation is that India has been disproportionately successful in producing corporate leaders (much like certain populations in the past were successful at producing generals or merchants), and due to trade and immigration links, some of its success has overflowed to the US as well.
Since 1984, India’s stock exchange has provided returns of an astounding 10,000%. Even the Dow Jones (3700%) has returned a fraction of the BSE’s returns.
This is a nearly forty year period, enough to average over most bear arguments. It spans the fall of the Berlin Wall, Kuwait War, 9/11 attacks, the Great Recession, the arrival of the internet, AI and smartphones. Given India’s strictly mediocre economic fundamentals in the 1980s, the success of listed Indian companies over an extended duration points to successful resource and work management.
Corporate India has played a much bigger role in India’s economic expansion than corporate China in China’s meteoric rise. The US tech sector has reaped an unanticipated reward of this fact. Globally though, the much more important economic implication is that India’s GDP rise is likely to be felt via private corporations, in contrast to China’s SOE heavy BRI.
Every time I used to play a strategy video game, my mind was firstly on money. Creating an income stream as well as buildings and units to magnify that income stream was the primary priority of my gameplay. Only then could I exercise my will and wrath on the codes of computer programming that were my enemies. I think recent history has shown us this is a powerful stratagem, especially on this side of the Atlantic.
The figure above shows that Indian American women make $1.21 for every $1.00 that a white man makes. I knew this data, but the infographic was brought to my attention to illustrate that not all South Asians are privileged. Pakistani women make $0.84 and Bangladeshi women $0.69.
Here’s the “problem” – 84% of “South Asians” are Indian American.
The reason that Indian Americans do so well is pretty obvious: human capital. They’re educated, they’re entrepreneurial, etc. At least to me. What if you believed that all outcome differences between nonwhites are due to white supremacy?
What have you heard about this? How is it people who now accept The Narrative explain how brown-skinned Indian Americans do so well while brown-skinned Pakistanis don’t? What have you heard?
The Indian capital, which just weeks ago suffered the devastating force of the coronavirus, with tens of thousands of new infections daily and funeral pyres that burned day and night, is taking its first steps back toward normalcy.
Officials on Monday reopened manufacturing and construction activity, allowing workers in those industries to return to their jobs after six weeks of staying at home to avoid infection. The move came after a sharp drop in new infections, at least by the official numbers, and as hospital wards emptied and the strain on medicine and supplies has eased.
Life on the streets of Delhi is not expected to return to normal immediately. Schools and most businesses are still closed. The Delhi Metro system, which reopened after last year’s nationwide lockdown, has suspended service again.
But everyone has to focus on the future. So what’s going on? How’s Modi’s going to supercharge the economy? I’m not Indian, I’m American. A strong India is good for America. An economically vibrant India is good for humanity.
COVID-19 is wreaking havoc on the lives of young children, students, and youth. The disruption of societies and economies caused by the pandemic is aggravating the pre-existing global education crisis and is impacting education in unprecedented ways.
Brown Pundits- Shahada, a UK College Lecturer, discusses COVID-19 with Michelle Kerr, a Maths Teacher from California. They compare their experiences, concerns and impact.
Covid-19 has impacted on Education on so many levels and there are many parallels with society in general:
COVID-19 is having a negative impact on young people’s mental health. We are concerned that, with most young people not currently attending school and many young people not having access to resources and materials with which to learn, there will be a subsequent detrimental effect on both academic attainment and wellbeing. Exams have been cancelled in many states and here in the UK. This is having a negative impact on attendance and motivation.
The COVID-19 crisis is likely to have a long-lasting impact on young people’s mental health and the services that support them, including schools and children’s services. The Government must consider this throughout its emergency response and policies to recover from the crisis. Has COVID-19 highlighted pre-existing decline in mental health?
The impact, particularly on groups who are already disadvantaged, is likely to widen existing inequalities and to contribute to a rise in young people looking for mental health support. Is this a reflection and consequence of inequality in education?
Discussions touched upon the existence of hierarchy in education and its parallels in greater society? For instance, will deprived students disproportionately be disadvantaged? Ultimately is this a reflection of class privilege?
A controversial point discussed was weather Teachers have a professional responsibility to physically go into the classroom. Both expressed very different perspectives!
Its been argued that Standardised tests are not an accurate representation of a student’s abilities and they lack reliability. We touched upon the controversial issue of removing standardised testing in education. Weather standardised testing should be formally put to an end. Has the removal of standardised testing been accelerated as a consequence of COVID-19? Will this result in a lowering of standards and skills? And again which group will be disadvantaged and advantaged?
Time will tell, the true long term impact of COVID-19 on Education…….
In its period of rapid economic growth, Indian democracy was successful in redistributing gains from urban centered, globalization led growth to the rural agrarian economy. The redistribution of available economic and administrative resources among competing groups is a primary concern of democratic politics. The situation is very different in non-democratic polities. In the figure below, we see that during globalization led growth, the ratio of per worker agrarian income to overall per capita GDP drops to less than a half in China and Vietnam, while it remained above or close to one in India and Indonesia. In other words, agrarian workers in one-party China and Vietnam became relatively poorer while their country became richer, agrarian workers in India and Indonesia did not incur a relative disadvantage.
In India the vast rural population with more than a century long experience in political mobilization, has pushed governments to spend money in rural areas. Redistribution has occurred via irrigation projects, rural roads, NREGA, subsidies, loan waivers and recently, direct income transfers. Any negative externality arising from agrarian activity has been borne by urban residents (eg: Delhi smog) but farmers were not penalized. Aside from rural-urban dynamics, democratic redistribution has led to a spatial equalization of agricultural productivity across the country.
Though the condition of Indian cities is depressing, the upshot of a democracy dominated by the rural majority is comfortable food security. In fact, even though India’s use of pesticide is quite low by global standards, and its agricultural yields, cold-chain infrastructure sub-par, it has become a major net agricultural exporter. This is in huge contrast to China which has become a massive net importer of food. This is an important strategic advantage for India.
There are signs, though, that India’s redistribution toolkit might be reaching the limits of its efficiency. Concurrently, a more reformist Indian government, awash with surplus grain, wants to re-orient farmers towards higher return crops or even an exit from farming. An urbanising electorate may also not be as willing to redistribute their hard earned tax monies towards their rural co-citizens.
The reorientation of the Punjab-Haryana farmer away from rice and wheat will require tact and persuasion, not ordinance fiat. The set patterns are very comfortable from the economic (MSP + diaspora remittances + armed forces recruitment) and psychological (we feed and secure the nation) perspective. The simple promise of higher incomes might not convince historically agrarian communities who havent fully embraced the money economy.
The Prime Minister has proven to be a masterful communicator. We have not yet seen the same skill in his dealings with the farmers. The approach there has oscillated between genuflection and disregard. The potential is there for the 200000 sq. km tract of well irrigated, fertile land in India’s north west to become the new California Central Valley (47,000 sq km). India can then become the land that greatly increases global access to premium agro-products like fresh, dry fruits and vegetarian protein. The latter (beef-mukt world) will also resonate with many urban supporters of the government and even the farmers themselves.
India isn’t exactly known for efficiency. The chaos that slams your senses as you step off the plane into the Land of Dharma stands in contrast to the sense of stillness that India’s old wisdom brings. Today’s India is in constant churn. Still shackling off the chains of colonialism and bureaucracy, India can appear to move at the cumbersome pace of an elephant; but sometimes, that elephant charges.
FinTech is an arena of speed and nimbleness. Firms move at the pace of a nimbus cloud as startups rise and fall in an increasingly competitive space that promises to transform a world moving from analog to digital. Security is also placed at a premium, as conflict transitions from firing mortars and metal to acquiring capital and computer power. But above all, what is needed in FinTech is efficiency.
A country known for a fetish for over-administration would be assumed to be one of the last places to find quite possibly the most advanced and successful FinTech “stack” on the planet. Cause and effect enjoy playing coy and serendipitous games with each other, and it is in India where we find the confluence of separate information streams merge into the exceptional India Stack.