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The hundred billion dollar drop

The hundred billion dollar drop


How a small investment firm is taking on one of the world’s richest men

Today… the largest con in corporate history. Or, is it? 

“2022 was a exceptional year in many ways…”

Gautam Adani

This is Gautam Adani. He’s an Indian industrialist and he’s one of the richest people in the world. 

In fact he was the third richest person in the world – fighting with Jeff Bezos for second until late last month.

But a lot has changed in a week. 

I’m focused in on Adani right now we’re seeing the bonds absolutely tank across the Empire….”

Bloomberg TV clip

And that’s because of a group called Hindenburg Research, a small investment research firm based in the US. 

They’re short sellers in the stock market: they bet against companies they think are overvalued or fraudulent. Essentially… they publicly criticise companies and make money by betting that share prices will fall

Here’s its founder, Nathan Anderson, speaking to Aleks Krotoski for Tortoise: 

“A bubble in my view is when a corner of a market grows, not for reasons deserving of growth. It’s an irrational growth based on this perpetual feedback mechanism, where if some people invest, maybe the value of the thing goes up and then people see the value of the thing going up, so then more people jump in and,, maybe underneath it it might in fact be a scam. It might just be insiders, stealing, or it might just be one of these kind of perpetual growth that eventually explodes…”

Nathan Anderson speaking to Tortoise

Hindenburg Research is in the business of popping those bubbles.

In the past, they have taken on – and popped the bubbles – of an American EV battery maker and a geothermal power firm based in Nevada. 

And while they won’t disclose how much money they have made off these bets, the impact on the companies involved have been substantial.

They even offered a 1 million dollar bounty for anyone who could prove their claim that the cryptocurrency Tether was fraudulent. 

This is actually how we ended up speaking to Nathan Anderson. In our new podcast series Real Money… Tortoise has set out to win that bounty.

Now, Gautam Adani and his company are the latest in the Hindenburg Research crosshairs. 

And in a 100 page document, compiled over two years, and published in late January… Hindenburg Research laid out their allegations..

They claim that Asia’s richest man, and one of India’s biggest multinational conglomerates, have pulled-off what they have called “the largest con in corporate history”. 


So who are the Adani Group?

They mine coal, run ports, build airports, manufacture defence equipment, operate fleets of trucks and they are aiming to become India’s biggest green hydrogen producer. 

But… the Hindenburg Research report claims that, over the course of decades, the company “engaged in a brazen stock manipulation and accounting fraud scheme.”

And the timing was particularly damaging.

Their report was published just before a planned $2.4 billion dollar share sale by the group’s flagship company. 

“God it couldn’t get any more serious for a public company like this to be honest, and especially since when you’ve got, I mean, you already have so much drama out there with the market cap tanking by more than a hundred billion dollars…”

Bloomberg TV clip

Initially the sale appeared to go ahead. 

But then…

[Clip: Gautam Adani speaking about the stock offering]

By the time the Adani Group cancelled its stock offering… more than $100 billion dollars in value had been wiped from the company. Gautam Adani has lost nearly $50 billion dollars of personal wealth. 

As a result, he’s slipped down the rich list.

But this isn’t really a story about an impossibly rich family becoming less rich. No – the reason it matters is because of what the Adani scandal means for India. 


The Adani Group adamantly denies the allegations. It has called them: “a malicious combination of selective misinformation and stale, baseless and discredited allegations”.

And it has characterised the report as an attack on India. 

Gautam Adani has been close to India’s Prime Minister Modi for years, and his companies play an important role in India’s infrastructure. They are central to India’s growth agenda and responsible for thousands of jobs.

The group accounts for 7 per cent of all capital spending by India’s 500 biggest companies.

And the attack by Hindenburg Research has raised doubts about the economic miracle that’s supposedly transforming the country under Modi. 

Gautam Adani is the face of Modi’s ambitious economic expansion.

Now the group is being called into question… and so too is Modi. His opponents are demanding an investigation into the accusations made by Hindenburg Research against the conglomerate. 

And foreign investors who have been expanding into India – particularly as an alternative to China – might now be thinking twice. 

Only time will tell if the accusations are true. But Hindenburg Research has, once again, shown the power of short sellers. And the Adani Group, toppled from their perch, will have to fight to undo the damage.

This episode was written by Claudia Williams and mixed by Imy Harper. With thanks to Joanna Humphreys and Aleks Krotoski from the Real Money podcast.