Shorting Possibility - Adani Group, India

Ticker: Unknown
Description of why you are requesting DD: Hindenburg short report on Adani Group
Applicable links to news articles or Reddit analysis: Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History – Hindenburg Research

Hindenburg Research - the famous and contentious shorting firm - dropped a detailed short study on the Adani Group, which is one of the biggest conglomerates in the world, and is headed by the world’s third richest person.

I am not familiar with India at all, other than the basic ETFs that give exposure to the entire Indian stock market, so hoping someone knows a more surgical way to play this. Or we can crowdsource this together.

Part of the tl;dr:

  • Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.
  • Gautam Adani, Founder and Chairman of the Adani Group, has amassed a net worth of roughly $120 billion, adding over $100 billion in the past 3 years largely through stock price appreciation in the group’s 7 key listed companies, which have spiked an average of 819% in that period.
  • Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries.
  • Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations.
  • Key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. 5 of 7 key listed companies have reported ‘current ratios’ below 1, indicating near-term liquidity pressure.

Tables below show how the recent stock price surge is inconsistent with industry multiples and current liquidity risks:


Possible plays, in order of potential effectiveness, if market buys this short report:

  • Shorting the India stock market
  • Shorting ETFs that hold Adani companies
  • Shorting Adani companies directly - so far, they seem to be listed in India only
  • Shorting companies listed in the US with significant exposure to Adani companies

Eliant Capital posted about this (tweet below), looks like they are targeting $INDA. From reading the thread, 43p for Feb seems to be what they bought. I did not verify but INDA appears to be comprised of about 5.5% of Adani Group companies.


So spent few minutes tracking down all of the top US traded ETF India related just to start. And then looked to the sector holdings of each as Adani corps aren’t directly traded in the US there is some residual downfall likely here. Especially in the sectors they are strongly based.

Just wanted to start here we can dig further but the ETFs I have found.







I’d largely expect what ever segments Adani is most tied into they ETFs most closely associated with those sectors would likely suffer sympathy sell offs. Not to mention any business dealings that could be affected.

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This one holds about 6.7% in total across the adani sompanies -

and this one about 5.6% -

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Looks like only INDA has any reasonable liquidity in options, and only after the mad volume today:


For completeness, Mysterious suggested in chat that we also look at EU listed companies to see the effects there.

Mimir’s answer to the EU prompt was:

The EU listed stocks or ETFs that could be negatively affected by the crash of Adani Group on NSE India (symbol ADE) would be those that have a direct or indirect exposure to the Indian market. This could include ETFs such as the iShares MSCI India ETF (INDA) or the WisdomTree India Earnings ETF (EPI). Additionally, any EU listed stocks that have a direct or indirect exposure to the Indian market could also be affected. For example, companies such as Tata Motors (TTM) or Infosys (INFY) could be affected.

Also worth mentioning that Adani is not Tata. The two conglomerates compete against each other in several areas. Tata May see sentiment movement as a result.


Their 2022 financials don’t look real promising for sustained business

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Since Adani companies are alleged to be overleveraged, banks should also get into trouble.

One list here:

Mimir says (needs verification):

According to reports, the following banks have given loans to Adani Group: State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, HDFC Bank, and Yes Bank.

Apparently 40% of the loans are from the State Bank of India (lol…) and the rest, private:

“Out of the major loans obtained by the Adani group (from April 2020 to June 2022) of Rs 48,000 crore, (nearly) 40 per cent is funded by the SBI alone, that is, Rs 18,770 crore,” Vallabh said.

“Fourteen global/ private banks have funded the remaining 60 per cent (Rs 29,000 crore). This exposes the most prominent Indian bank to a huge risk. The report highlights that these businesses do not make profits in the initial few years, and hence there is a likelihood of rolling over/ refinancing for interest obligations, for which they would again have to reach out to banks.”

ICICI - $IBN - is the only one with a NYSE ticker.

Edit: As JJCox notes below, HDFC is also publicly listed - $HDB.


HDFC is also publicly traded it looks like. The 6 top holdings in INDA all have business relationships with Adani. Including ICICI and HDFC


Thanks JJ, missed that.

IBN (ICICI) seems to have decent option chains.

Overall, looks like INDA and IBN are the frontrunners in terms of accessibility.

Will try to grab some bearish put spreads in the morning.


I picked up a few of each with March exp

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I’m in with a couple INDA looks like HDB and IBN have taken a hit today.

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Interesting read seems some big players were scooping up their FPO


Banks took a bigger hit it seems, than INDA. My orders never filled; hope some folks were able to capitalize on this. Let’s see how the banks are treated overnight in India, and we could see follow-through selloffs (or not) tomorrow during RTH.


Just plugging this article here good read half way through on shorts impact


A little more on heidenberg