For all the brouhaha around the Adani saga, let’s understand some facts.
And before I share those, let me clarify that I don’t have a single rupee invested in any Adani business. Out of choice. Was not convinced about it being a worthy investment for me.
Here’s the 🧵 then..
And before I share those, let me clarify that I don’t have a single rupee invested in any Adani business. Out of choice. Was not convinced about it being a worthy investment for me.
Here’s the 🧵 then..
1. Unlike say, a PMC Bank saga, Adani’s current failure is around loss of market cap. It impacts investors in the stock, but not exactly your average middle class Indian citizen. It’s not like their bank accounts have got frozen etc.
2. They don’t say “equity investments are subject to market risk” for nothing! Even as you might have got irritated by that disclaimer, now you know why it’s spoken! So if you invested in equity, you did so with your eyes open!
3. There are believers who are holding on to the stock. They reckon Adani will bounce back. But if you’re panicking, well, sell and exit. Unless you invested last week, there’s a good chance that you’re in positive territory, and even otherwise, you may want to cut losses?!
4. So, what’s the other concern with this collapse? That there are large scale infra projects being executed by the firm. So far, we don’t have any Indication of defaults on those. As / If and when that happens, yes, we would have something to worry about.
Mostly around transitioning the projects to someone else and loss of time and money in doing so. But so far, there are no indications to say anything of that kind is happening.
5. What else? The country’s reputation from a governance / economy perspective? There are far too many other Indian businesses that are all doing phenomenally well, and the country’s reputation is not that fragile to risk being destroyed by a single group having issues.
End of🧵
End of🧵
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