The Adani Hindenburg Saga has dominated the economic news in India recently. The fact that a small financial analysis company with a dubious record of shorting smaller companies managed to topple a whale like Adani shows the fragility of the Indian stock market and how much we still depend on the approval of western agencies and investors. 

Some have called it a conspiracy against India, while others have said the Adani group had it coming for them. Among all the rhetoric and chest-beating, the sanest and most nuanced view comes from Ashwat Damodaran

When the Hindenburg Research report targeting the Adani Group came out a couple of weeks ago, I was surprised for a simple reason. I have seen this group target companies before, using the game plan that they are using with Adani, but their typical target firms are usually much smaller, under-the-radar firms, where public market investors may have missed troubling aspects of operations. The Adani Group is a huge target by the standards of any market, and it is one of most widely talked-about Indian firms. I must confess that I find the Hindenburg shock-and-awe approach of throwing up dozens, perhaps hundreds of accusations of wrongdoings at a firm, hoping that something sticks, off putting, since even if I am in agreement, I find myself spending time trying to separate the wheat from the chaff, the big wrongdoings from the minor distractions. 

YouTube video

Ashwat’s point of Hindunberg’s shock and awe approach is demonstrated even in the report’s title – The Biggest Con in History. He states that a con game is one where you have no substance and use trickery to cheat people. Adani is a very competent player and has created a significant dent in the Indian market. How could he be labeled a simple conman? 

Ashwat takes the same facts that Hindunberg exposed but gives a very different reading. He has no personal stake in Adani stock, so his point of view is as unbiased as they come. 

  • He mentions that the claim that Adani used shell companies to ratchet up the stock price is probably untrue because the shell companies did not trade enough during that time period to influence the share price significantly. The shell companies were most likely to preserve the family’s ownership in the larger Adani group. Even today, the family owns 72.52% of the outstanding equity in the group, which is unheard of in a company of Adani’s size.
  • The stock price also increased because foreign institutional investors made lazy bets on a rising company without doing their homework. They just dubbed it too big to fail and kept pouring money into it because they wanted to participate in the India story. In the end, Adani is an Infrastructure company that will grow at 6% YoY at best and should not be trading in the same league as high-margin technology companies. This narrative is very different from the stories of market price manipulation spread by Hindunberg.
  • Adani being overleveraged by debt is not a con game. It’s the typical story of an infrastructure company trying to grow very fast, very quickly. The family used debt to finance their growth, and financial institutions were happy to fund that growth and use the stock price growth as collateral. That’s common in India, where banks are much more comfortable lending to family-run businesses.
  • Ashwat pegs Adnani’s stock price to be in the 950 – 1000 range, which is still 50% lower than where it stands today. Here states that investors in family group companies, no matter how honorable the family, are buying into cross holdings, opacity, and the possibility of wealth transfers across family group companies. Those risks increase if the family group companies are built around political connections, where you are one political election, a loss away your biggest competitive advantage. 

I loved this take because it was refreshing and objective. He exposed the incorrect conclusions in the Hindenburg report and called out the foreign investors for being lazy and not reviewing facts and data that were publically available. He also spoke about the risks of investing in a family-run business and gave the stock a realistic value. That was so much butter that extreme positions were taken by the mainstream media that wanted to either defend or defame Adani. When it comes to foreign investors rushing in and rushing out of investing in Adani, I remember a story shared by my guru a few days ago. 

A saint gathered significant spiritual power after years of Sadhana. He started healing and helping people around him, and word of his popularity grew. People started thronging his ashram, and the queues to see him stretched out for miles. They were all miracle seekers. They did not come to him for any spiritual advice or wisdom. One day this saint walked out of his small hut with a bottle of alcohol in his hand and swayed around, seemingly drunk. Almost everyone who came to see him murmured under their breath about false saints and went back to their homes. Only a few genuine seekers of truth stayed back. The saint smiled and told these devotees that the ones seeking miracles are the first to turn around when they see the guru with the bottle. 

Ashwat’s take on the Adani story and his meticulous explanation of the facts reminded me of another story narrated by guru Om Swami. He was talking about how our Puranas – spiritual stories – were meant to be orally conveyed and not written down because the teacher would explain the esoteric meaning of the stories and answer the questions raised by students. 

The Birth of Ganesha

YouTube video

One such story is about the birth of Lord Ganesha. The divine mother, Parvati, the consort of Lord Shiva, created Ganesha and asked him to guard her palace. He challenged Lord Shiva and did not let him enter her palace. Lord Shiva severed his head with his trident. When he saw the grief it had caused the divine mother, he placed an elephant head on his neck and raised him back to life. 

Many of us have questions when we hear Lord Ganesha’s story. Why would Lord Shiva — the divine yogi who knew everything in the universe — cut off his son’s head? Why would he replace it with an elephant’s head?

Parvati, the divine mother, made Ganesha from her dead skin, which is residue. The residue signifies desires that you cannot abandon. This residue becomes the greatest barrier that stops you from realizing your true potential. The storyteller tells you that since mother divine created Ganesha from her residue, she is attached to him. To destroy those attachments, you need the help of a great yogi such as Shiva — the first and the greatest yogi. A Yogi does not destroy attachments because attachments are a form of energy. Lord Shiva could have transformed Ganesha into ashes, but if you turn energy into ashes, you will have nothing to work it. Hence, Lord Shiva destroyed Ganesha with a trident. A trident has three heads representing three modes of material energy — Sattva, Rajas, and Tamas. You need to use all three modes of energy to understand your attachments and get rid of them. Lord Shiva cut off the head because that’s where all our attachments and desires are rooted.

Lord Shiva discovers that he actually needs Ganesha to keep the divine mother happy after cutting off the head. It’s symbolic because the author tells you that every human being has both masculine and feminine energy − a perfect balance of emotion and logic. You need to balance both energies to lead a happy life.

Lord Shiva placates the divine mother by placing an elephant’s head because the elephant depicts mindfulness in Indian scriptures. When we are mindful, then passions and desires cannot overcome us. We can transform them into productive energy and achieve our goals. That’s why Ganesha is worshiped before you start any task. You are praying to him to be mindful of all your actions and find success in your endeavors.


Did you notice how different this explanation is from the original story? It’s the same set of facts but interpreted very differently. It needs an expert to help you walk through the complexities and show you the true picture. This truth holds true for our spiritual and material lives. Why is this nuance important? Why is it essential to understand Shiva’s actions of beheading Ganesha or Ashwat’s breakdown of Adani’s business?

The nuance is where learning lies. Ganesha’s story highlights the role of Shiva in our lives. In spiritual journies, you will experience moments where your identity is severed by one stroke of your guru’s grace. However, he also gives you a new breath of life by teaching you how to work on yourself and move towards the ultimate truth. 

Similarly, nuance teaches us that the Adani story is not a magical fairytale of a company that rose from nowhere. The Hindenburg report is not a damning piece of investigative journalism that highlights hidden truths. Ashwat talks about the limitations and opportunities of investing in family-owned infrastructure businesses. When you buy a share valued at 900 for 2000 and ride a wave of optimism to 3500, you have to be ready to free fall on the waves of pessimism and reach 1500. You cannot blame anyone else for that.