Fitch spotlight on Adani debt, how much, how risky, reckless expansion or entrepreneurial audacity

#adani #fitchratings
Fitch Ratings' report on Adani group calls it 'deeply over-leveraged'. In Episode 1063 of Cut The Clutter, Shekhar Gupta analyses the report to bring out the highlights, positives & negatives of the group and how risky is its excessive debt for the country's financial health.
Brought to you by ‪@KiaInd‬
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Read Adani Green’s 2,021% Debt-Equity Ratio Is Second-Worst in Asia here: www.bloomberg.com/news/articl...
Read Adani's ports-to-power conglomerate 'deeply overleveraged': CreditSights here: www.business-standard.com/art...
Read ‘Promoters' loans, rising earnings help Adani cos to slash interest costs’ here: www.business-standard.com/art...
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[@ThePrintIndia]

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[@chandranshpandey1929]

How sure are we that these balance sheets are fine and fare. As far as I know balacne sheets of most such corporates are cooked. Putting all faith in adani balance sheets is fooilish.

[@JustCurioustoday]

@@chandranshpandey1929 your right to an extent every co operation does some amount of accounting stunts but when a co-operation as large as this one is concerned that margin of cooking reduces because your already in major spotlight Now I am not saying there are no exceptions to this rule but by n large speaking on probabilities you can take these books at face value maybe with a pinch of salt.

[@srinivasansukumaran2479]

This is cut the clutter !! Very well researched with proper facts.

[@yashkumar3196]

Who is going to discuss that they are getting all projects . Monopoly of business and u r so positive about adani

[@yashkumar3196]

How much money they paid u ????!

[@umeshg9107]

When Adani went to Australia to sign the deal in Queensland, He had Modi in one pocket and chairman of SBI in the other

[@kathiewest5842]

I’m 65 and semi-retired, having amassed about $850,000 myself with a lot of risky small caps,’ tech stocks, and some ETFs but I recently lost 20% of it. Do I pull out now or stay put, knowing that downturns can actually be a fantastic opportunity to invest/gain.

[@hillaryflinch2334]

That’s right! Downturns provide plenty of opportunities for regular people to build wealth from the scratch. However, you may need to get some professional advice from an Invest-ment planner if you want to take advantage of it.

[@lathamwilfred1181]

I agree, I've been in constant touch with a Financial-Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stock's, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k

[@alwaysbusy7230]

@@lathamwilfred1181 I need guidance so i can salvage my port-folio due to the massive dips and come up with better strategies. How can i reach this advsor?

[@lathamwilfred1181]

@@alwaysbusy7230 Having a coach is key in a volatile mar-ket, My advisor is “Dawn Marie Gatti” You can easily look her up, she has years of financial-market experience.

[@yolandagriffin2030]

@@lathamwilfred1181 Could really use the recommendation, I've been losing a shit-ton lately, I looked up Dawn Marie Gatti and I wrote her detailing my Fin-market goals,.

[@MsRoyalson]

What you said is correct. Now Adani ship is drowning very clearly!

[@gurneetchatha3830]

Looking back at this video Guarantees true journalism and research by host and his team . Great 👍 work !

[@raghvendrayadav9530]

Small correction Shekhar ji, At Yield to worst, the bond issuer/company will pay the bondholders only the principal. That's the way a typical callable bond works. Callable bond is a bond which can be recalled by the bond issuer/company when the market yields go lower than the yield to worst mentioned in the bond. Small edit from a random finance guy 😊

[@caesar_cipher]

A bond is marked callable at the time of issue. Since this involves "risk of prepayment" for the bondholder, these have higher coupon rates / interest payable by the issuer than his other non-callable bonds. The bondholder pays principal and due interests when calling. Not just principal If a bondholder would not make due interest payments, then its defaulted

[@mg.f.9023]

BJP MP Subramaniam Swamy once called industrialist Gautam Adani the “biggest NPA (Non-Performing Asset) trapeze artiste in PSUs.”

[@mg.f.9023]

"Debt ratio at Adani's green firm needs 'watching' as it soars to 95.3%" - Bloomberg August 26, 2022 18:15 IST

[@sid7186]

Brilliant... It's just brilliant...a prime example of cut the clutter.. One think I'd like to point...even Ambani sold their bit of holdings to Google, Microsoft and Facebook during lookdown... And eventually they become a debt free company (their cash flow is almost equivalent to their debt)....and now they own a little less than 50% in reliance industries... So if Adani dilute his shareholding which I guess they would do eventually... It shouldn't be a crash in stock market... ofcourse after such a rise there will be correction in stock prices Still if somebody is fantasizing about Adani's fall...should short their share 😂 Once again thanks to Shekhar ji... It was really an example of unhyphenated journalism

[@sudip_curiousmind]

One of the sensible comments that I have come across in the comments thread

[@critickiddo4126]

agreed

[@varunshivan9569]

So that means Adani is managing debt properly right?

[@rajx7120]

Adani dilute his shareholding? They have pledged their shares to raise debt. Do they have right to sell their shares, firstly?

[@sid7186]

@@varunshivan9569 the reports are exaggerated

[@jaydeepgadhavi5465]

One of the most content filled episodes of yours. Gr8 going sir 👍. Whether one calls it diversification, unrelated business ventures or conglomeration of business, that's not problematic but the fact that this diversification is debt driven & not investment driven is something that is concerning

[@sundareshanal1849]

SG is the shrewdest and smartest operator in the Indian media. He has an exquisite sense of timing and brings up topics which are sub-lingual and repressed in most sensitive commentators across our society. You have to give it to the man to be able to pull off a decent dare without disturbing any of the stakeholders , yet making every one happy that he brought it up in the first place with authenticity. And in the process diffused other potentially shrill narratives taking root, with as objective a presentation as is feasible. He has laid the table for a variety of expert commentators to build their cases. Economists like Dr.A.Subramanian have talked about the preponderance of the double AA in our economy. It is time there is a wider debate on the subject of oligarchy , concentration of monopolistic power & related issues.

[@rvnrr]

He manages to separate opinion from reporting while not shying away from airing opinion. Only other one like that was Khushwant Singh.

[@varunkhugshal9049]

Can you please comment on specifics rather then a generalised verbal accusation.

[@jaspreetmodi]

yeah and the beginning of video said it all i.e. [in low voice] am going to say the "A" word .. shhhh ! 😂😂

[@TheOpposition]

besides the print cannot be bought, it is powered by one of the top billionaires in India Kiran Majumdar Shaw. request SG to continue his centrist view point and do not fall on the either side.

[@AK-fd1tb]

It's not like he's lying you know. It's a reality of today. Adani has had big debts from a long time. It's all available on public platforms as well. You just have to look at it objectively. No offence not every billionaire is Tatas.

[@rameshreddy782]

Good evaluation and fair analysis. Everyone is interested in financial numbers and missing the facts on the ground. (My take is based on reports only). Adani Green has 6 GW of green power generation and requires huge capex and there after operational costs are low and depreciation and revenue takes care of the loans and interests. @6 million units it's quite substantial and they are continuously adding every year. Lot of his businesses are related but seem diverse. Example Mundra Port imported/ probably still imports coal and edible oils that feed two of his related companies Coal based power and Adani Wilmar. Again his purchase of cement companies is in synch with his power companies, Alumina is another power hungry industry that they want to get into. Similar is probably the case of gas that was imported and he teamed up with Total to supply piped gas. Just some numbers ports did 300 million tons, 14GWs coal fired power with Ppa's etc is phenomenal. These are all assets on the ground and substantial. They along with Other companies are setting up plants/ or already have to go from very basic polysilicon to full solar panels and take it everywhere in India to reduce our dependence on crude imports. Green hydrogen would be next level of achievement and these require huge economies of scale and need big players taking moderate to large risk to get there.

[@chennareddyindla2349]

Dear readers, I am also a businessman since 35 years.As per my experience, if i invest 1 crore in a business by taking loan at the end of the year I have to pay 18 lakhs interest + 12 lakhs to salaries and shop rents, power bills + 10 lakhs to my family expenses it amounts 40 lakhs. Shall I get 40 lakhs profit? In the same way Adani on 2 lakh crore 24000 crores interest + salaries say 10% 20000 crores + taxes 10% 20000 crores all together 64000 crores. Is Adani getting 70000 crores net income? If you won't get70000 crores his business fails. (I was forgotten depreciation may be 10%) I learnt this in my 35 years business as a engineer. So now I don't want to do business and ready to work as employee for one lakh salary. If any pl tell me.

[@Madhu2405]

Very authentic comment Sir. I appreciate you.

[@JEEVANMARATHE]

I guess on paper he manage more than that. That's why he is asia's most rich man. He has lot of companies but the most important and good thing is only 20% debt is from nationalize banks... but I can understand being entrepreneur is not easy and that's why only tata, birla, ambani and adani names are taken as they done great job in creating wealth.

[@vvkumar4806]

U seemed to be a fool. If you become an employee u end up paying 30% income tax and additional 20% GST, Petrol tax, Toll tax etc. Finally u end up paying 50% of ur salaried income as tax. If u do bussiness u can evade paying taxes showing that ur bussiness is under loss even though u get profits. Finally u end up paying 20% GST, petrol tax, toll taxes and probably 0-10% income tax. Salaried employees are the honest taxpayers and are more burdened by the govt. Every poor nd rich guy enjoys this way in India. Poor gets freebies from the taxpayers money. Rich evades taxes sometimes they don't even repay the loans to the banks which are again written off by the govt. So don't think to be an employee. U will be working like a honey bee all ur life and the honey u earnt will be stolen by others. After paying these taxes with ur hard earned money u don't get quality education, medical services what not U pay for everything in India.

[@klamotten3633]

That is a 40% return on capital employed. It's massive. Companies that can deliver this kind of returns trade for a huge premium in the markets. Most do not achieve this. Not on paper. Not otherwise. What you have assumed sir is that you are working with zero capital and are fully funded by debt. No bank will offer you a loan of 1Cr if you do not have a sizeable turnover and respective profits

[@somendrakarmakar]

I don't understand your calculations, on 1 crore working captial , you will rotate the money at least 4 times a year given 90 days cycle. Given 10 % net profit after all expenses gives you 40 lakhs given the minimum net profit every one offers.

[@hpremjit]

What do you think? This CTC: 1) Helps the Adani group 2) Helps the anti crony capitalists lobby 3) Helps the last ditch "save NDTV" campaign 4) Is so balanced that the investors looking for clues and clarity are left more confuse 5) Proves Shekher is the king of 'hot topic" analytical reporting. 6) All of the above

[@a12341u]

4

[@anantharamug196]

3

[@sjgghosh7677]

6

[@anshuraj4277]

So u admit Adani buying NDTV to influence it's reporting

[@Kirnotsarg]

5

[@rajpipla1]

India’s two richest businessmen have taken diametrically opposed approaches to debt fuelled growth and deleveraging. Time will show who has read the future of the global and the Indian economies better.

[@zetaforever4953]

Well, that was prophetic. Time has definitely shown, and how!!

[@chanakyabharat756]

Great episode, hoping Adani companies will be stress tested sooner than later.

[@parthparekh7471]

Stree test happens in Bank's balance sheet by RBI. How come pvt corporates can be stressed test, I am not aware.

[@chanakyabharat756]

@@parthparekh7471 ok sir, whatever terminology is right use that but that does not change the basis which is somebody has to ensure financial health being of Adani companies.

[@mg.f.9023]

@@parthparekh7471 BJP MP Subramaniam Swamy once called industrialist Gautam Adani the “biggest NPA (Non-Performing Asset) trapeze artiste in PSUs.”

[@atherzaidi5871]

Bhai shubh shubh bola karo, karwadiya stress test bicharey ka.

[@bonaku20]

Adani himself can’t defend his act like SG is doing 😂😂😂💰💰💰

[@cpselvam1]

Yes. Now PRINT is a Adani media

[@bonaku20]

@@cpselvam1 I will not say that... SG is biases towards Capitalism thought.... SG would have loved it if Adani bid for The Print insteadof NDTV.... LOADS OF FREE CASH 🤣🤣🤣

[@neon1899]

doesn't matter whether it is Congress or BJP, industrialists always profit, it's just the matter of which ones.

[@Vizorfam]

That is why capitalism will destroy the country

[@neon1899]

@@Vizorfam socialism is worse. What we need is capitalism with oversight

[@furrycurry8193]

@@neon1899 capitalism is bad like i hate it but it's alternatives are worse

[@tyagirule]

if they dnt ..Jobs are lost .. revenue loss.. eco loss... we must thank them for what they r doing..rather then 80% just looking for job

[@libshastra]

Naturally. If I put Rs 100 into a project, I expect to at least earn back that Rs. 100 back. But here is the thing about profit, most successful businessmen will reinvest that profit into ventures - some risky, some not so risky.

[@sayandeb6138]

Shekhar ji, you represent the last pillar of democracy.

[@ManishKumar-wb7vj]

yes he is note like rabish or abhisar dalla

[@rutvikrs]

🤦

[@anshul9462]

@@ManishKumar-wb7vj definitely not like Arnab Choswami.

[@ManishKumar-wb7vj]

@@anshul9462 no one can be like arnab vo kaffiro ki side leta h

[@venugiriaPleasanthome]

Sharing what you know helps others learn by doing research, synthesizing multiple viewpoints, and crystallizing ideas, thus increasing awareness. Thank you!

[@mg.f.9023]

"Debt ration at Adani's green firm needs 'watching' as it soars to 95.3%" - Bloomberg August 26, 2022 18:15 IST

[@e.sanoop110]

Another great vdo. Well researched topic and explained nicely and in layman's terms. Thank you Shekhar Sir and team. 👌👌👌😎😎

[@agonnoga6100]

@Guptaji East India Company and British were also "wealth creators". Majority of the old business houses like Tata Birlas collectively known as the Bombay club owe their rise to opium trade under East India Company and the British. Without state patronage whether it is Tata Birla or Adani Ambani either won't exist or will be fraction of what they are today. Dilli Durbar props up Bombay club and Bombay club props up Dilli Durbar and also the press.

[@AKThakur76]

What a farcical point, as if all that these businesses did was selling opium. Industries, hospitals etc were not their contribution.

[@arthurconandoyle6531]

How can a person be so dumb....Even your love 'Mao' of China argued that domestic capitalist needs live as dialectic(contradiction) is non agnostic....... So yaa every person tata birla adani Ambani needs to be supported.....

[@SuyashSharma8]

So true

[@AtomicVoid95]

The actual wealth creators are the consumers/demand side.

[@varunkhugshal9049]

Adani and Ambani how are they related to opium trade?

[@Subh8081]

55% of Adani debt in 2016 from PSU was much, much smaller than the 21% of its debt from PSU now.

[@sbs5408]

True. I have a sense of unease with Adani group's debt funded takeover spree. To me it seems that Adani is "riding a Tiger". This happens very often with groups that go on a borrowing spree to fund voracious growth appetite. Very few of these players make it without getting hurt. It seems however that Adani is nowhere near any pause. We keep hearing of takeovers almost every week nowadays. This is worrisome.

[@nikhilgupta5733]

One of the finest episodes. Answered a lot of questions of mine which are not to be found by at least me due to being a non finance guy.

[@aviswetanandy6324]

A brilliant analysis. Your simple and explicit analysis on markets kept me engrossed and wanting more of it. Well done

[@akshay.in.ception]

15:50 this is exactly why i am your subscriber, not ThePrint's but yours shekhar sir. Many journalists assume their viewers are sound in a domain they are talking about but you take no assumptions. I wish financial topics were covered like you do by ThePrint and everywhere else.

[@hpssahota1977]

What an Episode... Kudos to you and your team. The Final Analysis on source of the debt made the episode more fruitful..!!!

[@krishnaxyz]

I see quite a few viewers wanting Adani to fail. So much strain to hate a person in India. It's a professional report and trust professionals are at work to rectify this. Report itself says 2l crores breakup. PSUs risk is 20%. Rests are split between intra corporation debts and foreign banks. Even if he choose to run away from India he won't get refuge anywhere outside India.

[@el-jp3xp]

If u love adani that much give ur property to him, No one hates other here,dum#@$$

[@samyakjain3417]

@@el-jp3xp 🥱 Stf up kid adani won't get affected by your hating

[@o9708]

@@samyakjain3417 and these very kids would call foreign billionaires there 'idol'😂😂

[@arthurconandoyle6531]

@@el-jp3xp Abdul pls come with your orignal Id and express your opinion about 'islamic Banking '(as suggested by Rajan😂😂)

[@sreenathgopinathan4002]

RBI should increase interest rates in line with hike in US fed rates. Let the debt takers pay more interest.

[@MohitSharma-dt6iy]

Going forward it may be helpful to highlight Total Assets/ Total Debt ratio, Cashflow from Operations/ Total Debt ratio. To give indication how easy or tough it will be to repay debt for the companies

[@saurabhsaksena324]

Suddenly this guy becomes a corporate guru and gives analysis of a large corporate's balance sheet. This guy is so skilled!

[@jaihind5009]

9:52 Very nice analysis and easy to understand examples. thanks SG sir👍🏻

[@georgerj9125]

I am a layman as far as the world of businesses is concerned. Sir, your explanation went a long way in helping me understand and gain an insight into the corporate world you presented with greater clarity and easily comprehensible examples🙏🙏

[@debasisbehera7867]

Nice one Sir. Your lucid presentation of complicated financial matters making it easy to understand for people of non-financial background like me is praise worthy.

[@sauravdas567]

Shekhar sir , thank you for the great analysis, it helped me who has very little knowledge on market to understand many new things . It also gave a broader sense of understanding on the words "A&A" which usually flashes on screen and uttered by lot of politicians.

[@anuraktjain8771]

Cut the clutter = Real Picture...thank you SG for a wonderful breakdown of the report. You should do this more often, maybe you can do an episode on US economy and fears of recession.

[@Madhu2405]

Superb, easy to understand analysis. Overall message I get is: Don’t blindly get swayed by people saying that the Govt has pawned the country to a Cowboy Entrepreneur.

[@shubhamjha4998]

Public sector banks are in loss not because of its employees as it is shown but due to corporates like adani who takes loan and never pays back adani can't sustain a single day without government support in 1980,90 politician used to keep criminals for looting polling booth and today's government is keeping capatalist criminals so that they can get thousands crore donation for their election campaign

[@tony16991]

Thank God for Capitalism. Commies shouldn't be allowed 1000 miles near any economic sector

[@narayanp9270]

Thanks for your perspective. Nowadays Adani and Ambani are used as curse words.But no one sees how much employment they generate.Congress State Government like Rajasthan whole heartedly welcome Adani but same Congress leadership curse Modi on Adani's name.

[@maestoso47]

Typical crony capitalist comment.

[@mukulbaruah1147]

Aadani Aanbani gujrati corporate east India company .MoDi Amit shaw owner hay yeh company ka

[@yusufz1987]

the unemployment situation is terrible today. What the hell are you talking about?!

[@mg.f.9023]

BJP MP Subramaniam Swamy once called industrialist Gautam Adani the “biggest NPA (Non-Performing Asset) trapeze artiste in PSUs.”

[@orunabho]

Brilliant SG, what we will do without the clarity you bring to the table. 👏 👏 👏

[@kumarabinash5505]

I see the expansion of Adani in "unrelated areas" as a risk absorber. If they miss out to hit the bull's eye in one or two fields, which will eventually happen one day, they'll have the scope to maintain their cash flow, pay back ability utilizing their hold on other fields.

[@dawnofkitty]

Wah kya logic hai.

[@libshastra]

@@dawnofkitty it's a legit business strategy called diversification. Diversification is expensive and difficult to pull off but can save companies. Tata is a great example, Tatas started with Steel but diversified into other products. When Tata Steel was bleeding money, Tata Chemicals was making tons of money. It padded the cashflow of Tata group.

[@AayushD]

You're correct, ideally speaking. However, there's another aspect to it. Raghuram Rajan became famous for "predicting" the crisis, but that's not what he did. At a time when securities and further synthetic securities were being created in the name of "hedging", his seminal work argued that they're multiplying the risk instead, creating a system which would fall like dominos. Similarly, here the Adani group borrows from banks using its profitable and sound companies and then further lends the funds to another group company where they're looking to expand. So if their speculative investments don't work out, it will also stress the finances and working of the "sound" and healthy business of the group. Which would then impact the banking sector - all of Adani's loans are from PSBs which the taxpayer might have to bail out in the name of "recapitalization" and NPAs. Edit: I am wrong about all his loans from PSBs.

[@tube7786]

Wah modi ji wah

[@dhrumilmodi2813]

Debt in one company is not going to be paid by the other one. Debt of any failed company will turn NPA and hurt the banking system!

[@swatikarle3029]

Excellent analysis sir. Thank you for addressing the elephant in the room. Even the rational minded were influenced by the media stories this time. This shows that fact based investigation of any issue/controversy is so important.

[@srinivasangkailasam8952]

A Company by Company analysis of the Adani Group would be interesting. That can give a better picture. Example, Total Adani and Adani Wilmar have better cash flows and could be less risky. Hope for an episode covering each company of the Group.

[@Kirnotsarg]

Now the questions are - Who are the international investors who account for over 50% debt in the Adani group? How did Adani convince them? Who are Indian bankers who approved loans to Adani? How much of Adani's loans/bonds are pre and post Modi eras? How do the Mauritian shell companies manipulate Adani stocks' prices? Could Adani become India's Evergrande? What if Adani flees from India like Mallaya/Choksi?

[@gsnayak06]

I was hoping I will hear from you ( due to your closeness with Roys) something about how NDTV got Rs400Cr unsecured loan at 0 interest to payback a loan from ICICI bank that was at 19%

[@n______n26]

In exchange of rights over shares of the holding

[@shankarramaswamy7125]

@@n______n26 and not paying any of the loan amount for 11 years so that full warrant be allowed to exercise!, wow!

[@deveshkumarjoshi3289]

Good analysis by the authors. But it is also a fact that Reliance and Tata etc. have diversified and entered in unknown areas for them. Reliance started with textile and now in Petroleum, Retail, Tele communicatios and many other areas. Tata started with Steel products and now in aviation. Data processing to vehicles etc. Of course I am not aware of their borrowing

[@Ajay-vf6di]

Yes, but they expanded over the period of time after carefully evaluation. For example, Reliance group took two generations to become who they are today. Same with Tata. But Adani group is racing with time and gambling with luck as their bail out.

[@theindian2226]

For me it's a totally uncharted area. Thanks Mr. SG, you have voyaged me into it.

[@Drganguli]

Around the world, most of the optics of high standards of living is fueled by people, businesses and companies taking debt

[@divyeshmandavia979]

Thank you, SG sir for this clarification. Once Reliance also had Rs 3trn debt. After selling Jio stake to FB and other companies, they are now net debt zero. Considering real debt of Rs. 1.4-1.5 Trn, it is nothing as compared to mcap of these companies and their growth trajectory and order books. Contd. thrust on infra will allow it to grow unless big geopolitical crisis happens.

[@ecoideazventures6417]

Good point Divyesh, but there are too many risk factors that you have quoted - Mcap is highly volatile and Adani has to show its capability in delivering all its projects. Check its record in Australia!

[@pratikbhavsar241]

Why dont anyone mention why adani have such big Mcap comparing to revenue? Don't LIC ( read govt) and some fruad FIIS has pumped it's stock price. It's scam involving govt to trap retail investors. Retailers should stay away from Adani stocks

[@vijayabharathimarupudi3484]

MCAP is volatile and on paper .DEBT IS REAL ,EXECUTION IS REAL

[@vijayabharathimarupudi3484]

Reliance MANAGED net debt and shown as zero .but ask any analyst .they will tell that net debt is 65 to 80k crores

[@divyeshmandavia979]

@@ecoideazventures6417 Yes, mcap is volatile but not unreal at least for public listed companies. You can boost the valuation for short term but not long term. Currently, most of Adani ventures are creating cash (profit) and not like start-ups or Anil Ambani group companies who are boasting valuation on nothing. I agree they are overleveraged but in growing phase, the companies either overleveraged or underpriced based on sentiments around the debt. The same happened to RIL when they have done Jio expansion but once the valuation actually realized during Jio stake sale, their share price skyrocketed. This was the example of undervaluation by the market. Now, market did not want to do same mistake with Adani companies where aggressive expansion with conducive regulatory/Govt. environment is win-win for everyone. Only risk is Adani-Ambani non-healthy competition in any specific area. It should not happen otherwise everyone will be loser. SG sir/FITCH report has pointed out the same. Rest are hypothetical risks with any companies.

[@thangamaniam2334]

No words to explain your brilliantness Sir, I was expecting a declutter on this topic for a very long time and hats off SG Sir for impartiality

[@mg.f.9023]

BJP MP Subramaniam Swamy once called industrialist Gautam Adani the “biggest NPA (Non-Performing Asset) trapeze artiste in PSUs.”

[@GinzaGeorge]

Great bird's eye view with layman explanations. Thank you for thinking of putting it together for us.

[@navindipali5862]

Looks like Shekar sir is scouting For Adani advertising 😊

[@soorajravindran1081]

Expecting a similar gymnastics show about Hindenberg report as well. Or will you conveniently skip that?😂

[@yuzihao8777]

He just did

[@rajs3181]

Thanks SG for doing the hard work of interpreting these reports for laymen like me. Along the way you were a fantastic teacher to inculcate basic finance knowledge to common public. No big company that has high ambition to grow can survive without being close the present day government. The challenge is when the Lakshman reka is breached by treating these companies as chronies. Hope and wish for the good of India the current dispensation is mindful and maintain that distance with corporates.

[@DrSudhirBisht]

Dear Gupta ji Excellent I want to add that debt: equity ratio is 2.5: 1 which is not bad at all. Tata Motors has a debt equity of 2.2 and it is a 77 year old company Regards

[@mridulagrawal6687]

Awesome sir,this is why I really admire u,all others who ask govt why aren't they reforming more,but then they also use these headlines only,to beat up the govt,why would govts risk popularity fir reforms in that case,u r sticking to principles of facts and continue to tell them to as many as u can!!

[@064anshumankar2]

India's march to oligarchy gathers steam. That should be the title. But adani's situation reminds me of Indian cricket team in the 90s. We were called paper tigers- invincible at home and wet cats away. Adani is a paper tiger who's building his empire in the clouds with debt. Sooner or later he will drown and take us all with him(whether we like it or not) coz his boyfriend in the pmo has handed over much of our national infrastructure to this crony at throwaway prices. So when (and not if) adani house of cards falls it will plunge India into a crisis like the great depression.

[@santoshpillai6945]

Please also comment on what would happen if Adani defaults on the foreign debt. Does it have any implications on Indian banks or Indian finances. If it is a case of debt givers suffer if Adani defaults, it is all fine.

[@sankalp6872]

Shekhar Gupta you are a gem. I disagree with Mr. Gupta's analysis several times but all his CTCs have always received my undivided ATTENTION and I have NEVER left any midway. He is a rare right-libertarian in an otherwise LEFTIST MEDIA UNIVERSE. The Print subscription is best money ever spent.

[@tanmayasahu5171]

Exactly 💯

[@VishalKumar-xp6gz]

Because he is also a businessman running a print media channel...so being right libertian supports his vested interest..anyhow I m lover of ctc

[@umadas5561]

Well done Shekharji on financial analysis. Please keep giving us such material often..please include compulsory section for public on finances of business groups.

[@surendrabarsode8959]

Who all have offered loans to Adanis? Are those lenders not aware of the financial condition of Adanis? Reliance has huge debts too but recently, it became 100% debt free. We can trust Adanis to repeat the same performance in due course but risks are always lurking around, known and unknown. Let us see after 5 years.

[@180190ful]

SBI is one of the biggest lenders to the Adani conglomerate. U think the state owned bank will refuse loans to a businessman with leverage in the highest corridors of power?!

[@surendrabarsode8959]

@@180190ful Did SBI lend after all others refused or SBI grabbed the account?

[@180190ful]

@@surendrabarsode8959 how does it matter?!

[@surendrabarsode8959]

@@180190ful One is the case of a usual commercial business decision; the other is of crony capitalism through telephone banking from New Delhi!

[@TheDonMan97]

There should be some kinda cap on businessmen like Adani who have a very high debt exposure. Government should prevent giving contracts and tender to them until their debt exposure comes below a certain level. I don't think India can survive a Evergrande level crisis...

[@ranadeepkundu5357]

So basically cripple them by doing no business with them so that they eventually default. 👍👍

[@Subh8081]

@@ranadeepkundu5357 That's half of the picture. You are thinking of the reactive impact not the preventive impact. No businessmen will risk losing Government contract if a cap is introduced in debt/equity for businessmen to bid on Government contracts and will self-regulate their debt exposure. If such a rule is imposed now, Adani will surely fail. So it's best to give a 5 year time to all businesses to comply to this rule.

[@subhashvyas3877]

Sir,thanks for research and effort.,new thinking on important subjects

[@thatswhatshesaid7935]

Great video SG sir truly an eye opener

[@swamidkbose]

The problem with Indian billionaires is that they own businesses in conventional sectors like, minerals, infrastructure, etc unlike western counterparts who have built businesses around emerging technologies like Apple or Tesla. The former is inherently dependent on state patronage and policies. It also smacks of crony capitalism because "Constructive Destruction", the reason for success of capitalism, is absent here.

[@_GMP_]

In India in 1900s onwards only Private Indians are in Minerals & Infrastructure field and only recently in 21st century more Indians are making money from these sectors but in USA it is there from 1800s and now consolidated with few players .Since new ones can't enter this field they are in other fields and In India in next decade big billionaires will be from other fields

[@maniaphobia4719]

We do not even talk about Emerging Technologies such as AI , Digital applications etc ; Leave alone investments ; India is projected as poor nation by politicians and media supports the socialist mindset ; Public is happy about it ; Its suits India with large population and vast tracts of land invest in Infrastructure in a big way ; India’s problems are Population , Poverty , Corruption ( large scale ) , Border troubles etc ; India is struggling to solve this ; At Personal level , am pained to make this comment ;

[@Indian-cv6hq]

Somehow you missed all the IT, fintech, pharam and e-commerce companies.

[@mayurkanth6987]

@@Indian-cv6hq lol how many billionaires are there in Indian IT sector???

[@ariktasaha345]

@@mayurkanth6987 many

[@shubhamjha4998]

Small business person has to show hundreds of documents for getting loan but these people gets loan without showing any documents and when they think they can't repay they leave the countries with the help of politician

[@anshul098765]

Because these companies are listed, SEBI is looking through their "documents" every month

[@subramrami1274]

Sir, pls don't give blind statements. For sure there are lots of Due Diligence goes behind every loan. Ofcourse there is soft power involved, but that will go only for an extent. else for the amount of loans all these large companies take, the economy would have been doomed a long time ago.

[@FundStory]

Paper Wealth can help control many things. It can be used to take loans too.

[@rosemist9]

Good simplified financial analysis for common men, the whole matrix revolving round the simple theory of credit creation. Interesting issue is too much weightage is given to market capitalisation, it is always goes with economic performance of india, other wise as you said it is paper valuation subject to capital market risks. Only consolation is his investments are in sizeable tangible assets and fair quantum of promoters investment.

[@jaihind5009]

SG sir - why do people want Adani/ Ambani to fail.. why they hate capitalism isn’t he giving jobs- isn’t he paying his employees well - In USA people & companies are open about there political lineage and to whom they find!!

[@SuperFatafati]

Because most people in our country is inflicted with cancer called socialism. They dont care that these industrialists bring industries, investments and provide employment. Not to mention the supply chain value addition. All they think is if its private company it is bad. They(indian people) deserve loss making PSUs with sub par products and services.

[@kallachi729]

ThePrint hallmark. “This is the picture, form your view”. The picture is clear. Good journalism. Tailpiece: My take. Wealth can be distributed only if wealth is first created. China recognised this in the 1970s…moved to capitalism to create wealth..and now have become the second largest economy. India started (slowly) the exercise at least 2.5 decades later. We can see the difference.

[@sagarpaul7934]

I am glad sir , you point it out , I don't know why in our country like to celebrate poverty as it is a great think.

[@pp_01123]

You are repeating what ES20-21 said! Nothing new :)

[@brainiac1595]

China keeps its wealthy people under a tight reign

[@kallachi729]

@@brainiac1595 Reign or rein, (political influence by CCP) the biggest real estate company in China has crumbled putting the Chinese economy at risk. You cannot and should not attempt to control the economy through politics. (Do not confuse with governence and constitutional institutions like, RBI, Audit, Tribunal and the courts). It is only now there is an environment in India for startups. In a decade or so we will see more Tatas, Birlas, Ambanis and Adanis emerging - hopefully.

[@kallachi729]

@@pp_01123 PP, so you feel that this thing about wealth and distribution was “revealed” for the first time in ES20-21. This is something known to mankind since Millennia!!! Enjoy.

[@karthiknr9142]

Shekar Gupta has always been ahead of his time!

[@shahryarhussain1001]

Can you share the link so I can read the full report please ?

[@fromearth4546]

Biggest misconception is that “debt” is bad. It is only bad for people who don’t know how to use it to generate “tax free wealth”.

[@well_said7846]

Debt is also very risky. And it is also not free.

[@omjoshi1748]

@@well_said7846 In certain extent.

[@sachin2744]

Yes. Rich people stay rich by taking debt.

[@mg.f.9023]

BJP MP Subramaniam Swamy once called industrialist Gautam Adani the “biggest NPA (Non-Performing Asset) trapeze artiste in PSUs.”

[@pushpindersingh1819]

Guptaji conveniently cut short the mention that the report also tells that 40% of all Adani debt is from SBI which is financed by the Government of India. Adani is not at risk Indian government is at risk, Indian tax payers are at risk. Adani can declare bankruptcy but the Sovereign Indian State has to pay by squeezing the individual tax payers even more by increasing GST. And as per RBI and Finance Ministry policy we will never come to know how much of this debt is written off by the Government.

[@omduttdixit6285]

Just an advice go watch some good reporting go watch think school episode on adani . government of india is at risk .

[@VarunKumar-jv4xt]

Sun bhai ..adani ki business kya hai ..itna pata hai tujhe ....agar pata hoga to sahi samjhega ...adani ki business physical assets me hai ..na ki yesa businesses hai jesa SAHARA INDIA KI TARAH samjha ..agar adani defaults hogya to bhi uska physical assets sell karke government apna paisa nikal legi samjha

[@BhanuPrakash-wt7zl]

I think you didn't listen carefully, he mentioned that 20% of his debts are from PSU banks. More than 50% are from international bonds.

[@shaswatmayur]

thank you for all the hard work. watching ctc is like ritual for me most of time it enrich my knowledge.

[@vitsboy46]

Excellent video breaking down everything ❣️

[@santosh.poojari]

Thank you, SG for decluttering the Adani headlights/breaking news. This was needed as haters and supporters of Adani were circulating their version of the story.

[@balasrinivas1411]

I read already these news articles .They are easy to understand in simple language

[@josephjohn2095]

Tku sir for this brilliant interpretation of Fitch reports analysis of Adani Group's businesses being overleveraged towards debts from banks & financial institutions & their huge expansion plans in everything trying to compete with its rival Ambani's. Ambani's are trying its best to rid it's Balance Sheet of debts & it's much less today than Adani's. Whereas Adani's own funds in their businesses are minimal & it's public money from banks that comprise a major portion of its debts which are at risk today. It's OK if their Board of directors are elected democratically & based on trust, honesty, integrity & professional excellence & team it's OK & group can last very long like the Tata's & Birlas otherwise it might not beyond the present generation of the promoters...

[@way2worldoffinance436]

Important point missed is the type of business Adani group does. Mostly they do big projects. Projects Finance requires predominantly debts.

[@GururajBN]

You learn and teach us. Having some teaching experience, I have found that writing and teaching are the best ways to learn a subject. Many thanks. It is astounding how rapidly Adani companies have mushroomed and grown so big. Any idea when did Gautham Adeni start these businesses? For everyone's sake one hopes that he does not fail and performs well. The areas in which his companies are engaged are also important for India. Probably, the central government should start watching this group closely but unobtrusively. By the way, what happened to the ADG group's Rs.22000 crores debit matter. Earlier you had done a CTC. Can you please update your viewers?

[@chinmoysonowal861]

This episode makes me think that we are still in an era where we doubt our big business names. A country with such set of mindset is not able to create multinational companies like Unilever, Google, IBM and like which does business in every part of the world The Indian Government should create a environment for them to grow. Even China has Multinational companies which rule the world. A long way to go for India unless we respect the wealth creators like TATA, Ambani and Adani.

[@arkajitmaity5277]

When Adani becomes the next Mallya, will you pay back his debts to PSB's, funded by the common man's bank balance ?

[@guruprasadseeryadavenugopa351]

We respect Tata, wipro HCL Infosys . We don’t like crony people like A& A and theist friends who took loans and ran away. Not a single corrupt business man has been arrested by our hero PM . I am sure they got good Chanda from them

[@arjavgarg5801]

@@arkajitmaity5277 reasonable concern, but no growth without risk.

[@varunkhugshal9049]

@@arkajitmaity5277 if you're sure of their failure you can become filthy rich by shoting their shares. Do it.

[@77sriganesh]

None of the MNCs noted above had this level of debt.

[@1uamrit]

News report of Adani trying to build hydroelectric project in Nepal brought me here. According to sources he is trying for 10,000 Mw project while Nepal is reluctant to give him that and want him to first try 500 mw projects.

[@kartikpoojari9663]

You have explained so well that the Fitch has over exgurate the whole picture. And you cleared it all

[@sgn9754]

You take SGs word against Fitch? Who knows wire is not owned by Adani?

[@victor7730]

Do you still stand by what you said.

[@sunnys2051]

Ratan Tata also did lot of reckless spending with his trial projects like Tata Nano. But Print won't bash him because, he is not that close to Modi. Shekar Gupta's partiality really shows.

[@rohitw614]

Neither you nor Shekhar knows real balance sheet only Banks know 😂😂😂

[@ramakrishnasunkavilli1603]

any person who becomes richest using natural resources of the country like ports, mines , power etc implies highest level of corruption unlike production of nano car where intention is to help middle class

[@ramakrishnasunkavilli1603]

any person becoming rich using natural resources of the country like mines , ports , power etc implies highest level of corruption unlike nanocar where the intention is to help middle class

[@sunnys2051]

@@ramakrishnasunkavilli1603 lets say that's how Adani got rich. But that's how the Gandhis got rich too. They were in power for 33 years and blatantly corrupt. But The Print hardly criticizes them.

[@user-eb7ku5dl7z]

From 55 to 21 percent doesn't mean one have necessarily repaid debt from banks, he might have borrowed extra such that the overall debt increased but the share of psu bank in the overall debt decreased.

[@alugulapati1]

Debt is one fragment of financing in Inorganic Acquisitions. Even Tata resorted to Debt for some of their well planned acquisitions. Now Tata is doing well though initially many have written off in the beginning of their expansion in global steel market.

[@ppp7236]

This vlog was backed and finance by AMBANI group

[@billumandal]

So when is pronoy roy starting programming for The Print ?

[@sunilshegdeable]

Good briefing... india is a growing economy. It needs a lot of infrastructure building. We need industrialist who can stick their neck out and support the country growth. It requires government support. So hope all this fits in well for future growth.

[@tjena5772]

Very clever Sekhar, your reporting and analysis walk as close to the precipice as Adani’s business!

[@vaizghani6710]

Does any one have a copy of the report from fitch, please share the link

[@punnavanamsubbiah7434]

Adani is in world of business and Modi is in the commerce of Indian democracy. In both the cases Indian citizen under risk. Modi blown beyond what he is worth ended in a catsthropic situation in media judiciary and economy which is reflected report on India by international agencies. More than declutering on Fitch , the true wealth creators on India is Tatas, Bajaj, Murugappa , Kirloskar, TVS ...But Ambani Adani are business people not entrepruner ...

[@punnavanamsubbiah7434]

@Kamal Roy not to the propotion of money borrowed or standard of Industry they do business. All the trade they in are mostly the government is the customer ...Example coal insisting state to buy ?? Power making law to forward trading with disadvantage of higher rate when market is low.... Today except only one birla family in business where is Anil... Professional business houses like Sarabhai disappeared but traders like Nirma, RIL, Adani needs public relations from seniors like SG.

[@yodavm7963]

My teacher taught leverage with the analogy of a car. A Car is a company and leverage means our car is running at 150 km/hr. It is a fast ride but if the road is not good (I.e. economy) and the car is not steered well (I.e. decisions of the company are not good) then the accident is a question of when and not how.

[@djsunshine1]

Please learn the Modern Economic Theory on KZbin!! Those days are long gone...your professor needs to learn!!

[@nikhilrodye8226]

obviously you had a bad teacher-relearn

[@Vidsagv]

Is there any idea on the amount of debt raised and outstanding in the personal name of Adani family and also the debts raised against pledge of the shares they own. This makes a very huge impact on the business too. Also while calculating the wealth based on market cap of shares was any adjustments made to the portion of shares pledged as technically these are not owned by them

[@saiyingpun7827]

The equity component in adaani corporate is inter group holding, and few companies have obscure Mauritius fiis equity shareholders, assuming all these are window dressing then work out the debt component will be much higher than 50%

[@DilipKumar-sz4mw]

I never trusted adani group, i never trust something that grows too fast....

[@sagarpaul7934]

No, bro it's not all hoax . You can ask any financial market guy . His investments are very futuristic and recently, I earn hefty amount of money through adani ventures in stock market. And I am betting on them for long term valuation .

[@sagarpaul7934]

@kunal kumar bro, you don't get it.

[@billumandal]

Tomorrow news : Adani buys fitch.

[@SwoleMonk]

Great video as always! Rests a lot of apprehensions around Adani group.

[@sanjaydutta1736]

Wonderful analysis. I also criticized government fr extra leveraging this group. Thanks🙏

[@unwokeist]

anyone after Hindenburg? lol

[@manishjain7676]

SG sir... You should look into Myanmar story.. why world is silent and most importantly india is silent.

[@tejas_yadav]

Because Mayanmar is not a western country... it's a sad reality.

[@Greygridsgraphics]

If debt can be monetized as crypto how early must the process begin....debt acquisition stage...or will there be a window to allow a threshold of repayment to be achieved or advanced prior to any conversion..