Every resident of our country loves India since childhood – fairy tales, stories about its beauty and sights, its history and modernity. The stories about the Taj Mahal, the Golden Temple in Amritsar, the Buddhist and Hindu temples confused us. Many people remember the charismatic Indira Gandhi, whose name is mentioned in many pages of the annals of Soviet-Indian friendship, or at least heard about her.
Even the younger generation knows that India is the first most populous country in the world (about 1.4 billion people) to surpass China. Currently, India is the main buyer of Russian oil, which came to our aid in connection with the sanctions on the export of our energy resources to Europe. Yes, of course India makes money from it by reselling Russian oil, gasoline and diesel to EU countries and the United States.
Not everyone knows that the country has the highest death rate, mostly due to traffic accidents. Especially in rural areas, the mortality rate of children under the age of 1 and pregnant women is high due to insufficient level of medication.
There is still a caste system. At the bottom are the untouchable caste Harijans, who are forbidden to walk on the roads and drink water from the wells used by representatives of all other castes. 14 million people, mostly women and children, are slaves engaged in heavy physical labor.
Almost 70% of the country’s population lives in villages where there is generally no modern sanitary and hygienic conditions, safe water sources, and 53% of the houses do not have running water or sewerage. Hence – large epidemics of dysentery, which is especially dangerous in a hot climate.
At the same time, an analogue of the American Silicon Valley was created: Indian programmers work both at home and abroad. Indian professors teach at US universities, and many of them are Nobel laureates.
India is the third largest economy in the world in terms of purchasing power parity, after the USA and China. In terms of military expenditures, the country ranks fourth in the world, second only to the United States, China and the United Kingdom, respectively, and ranks fourth in the world after the United States and Russia in terms of the world’s most powerful armies. and China. However, it ranks first in the world in arms imports, 75% of which is from the Russian Federation. It is known that Russia is preparing a batch S-400 system for India. India’s nuclear forces include cruise missiles, intercontinental ballistic missiles, etc.
At the same time, India has 70% of the world’s spice collection – various varieties of pepper, turmeric, without them the number of food poisoning would be many times higher.
1000 languages are spoken in India, Muslims coexist with Hindus, Sikhs, Buddhists, Jews, Christians and representatives of other religions and cults. India is a member of the “nuclear club” that builds a nuclear power plant but cuts off electricity in villages to save money. More than 1,100 films are released annually in India, which is double that in the US. The air is so polluted from the multitude of cars in Mumbai and Delhi that even a single day stay in these cities is equivalent to smoking a hundred cigarettes. Have you tried Indian cigarettes? I tried this when I was a student, then even rejected Americans. According to WHO, one and a half million people die each year in these cities from lung cancer or asthma.
Although the percentage of the poor has dropped from 52% in 1971 to 22% today, official statistics still show that 310 million people live on less than $1 a day. But according to the UN, there are more than 700 million poor people in the country, and that’s 58% already! And 21.2%, or 250 million people, live in extreme poverty.
At the other extreme are the ten richest families, who own 77.4% of India’s national wealth. The poor population of more than 60% has only 4.7%. And although the country’s main assets are run by the biggest businessmen, the most generous benefactors are the people of India.
In general, it is worth noting that Indians are very prone to entrepreneurship. Great fortunes were created in India in two ways. The first is the hereditary wealth inherited from the Indian Rajas and Maharajas that have accumulated over the centuries. After gaining independence in 1947, the two wealthiest families – Tata and Birla – virtually shared the entire economy of independent India, using both family capital and their connections in political circles. Meanwhile, according to the corruption perception index today, the country ranks an honorable 40th after the Scandinavian countries and ahead of Afghanistan, Somalia and South Sudan.
The second path is new entrepreneurs, especially in the field of high technologies and IT solutions.
Mukesh Ambani is the richest man in India with a fortune of $ 94.3 billion, according to Forbes. His business empire includes petrochemicals, retail and telecommunications.
Kumar Birla, a native of the Birla family, ranks seventh on the list with a net worth of $11 billion, which includes the cement and aluminum industries, financial and telecommunications services.
Second place went to Gautama Adani, whose name did not come from the pages of Bloomberg, Financial Times and other commercial publications. His fortune reaches $50 billion, and his business interests include ports and airports, real estate, raw material extraction and even data centers. He became a first-generation businessman who made a fortune in the diamond trade, and for a time was the richest man not only in India but also in Asia. In the future, he built his business empire based on connections led by the country.
But India’s stock regulator, the Securities and Exchange Board, is now investigating a possible breach of law in Gautama Adani’s $2.5 billion share sale. Another scandal occurred some time ago: American firm Hindenburg Research published a report accusing Adani of illegally using offshore jurisdictions to evade taxes. Adani was also accused of manipulating the prices of his shares. Notably, Hindenburg revealed in a secondary public offering that there was a clear conflict of interest in the Adani holding.
But that wasn’t the end of the drama. Hindenburg also claimed that Adani used the network of offshore companies to hide the group’s debts from investors and inflate its earnings in its reports. I note that Hindenburg specializes in short selling shares and acts like a corporate hunter – finding vulnerable companies, hitting them, and selling borrowed shares and buying them back at lower prices. The second victim of this raider was American businessman Jack Dorsey, co-founder of Block Inc., whose fortune was reduced by $520 million after the latest Hindenburg Research report revealed inaccuracies in the company’s report.
On the Mumbai Stock Exchange, investors sold shares of Adani Group as a toxic asset. While Adani denied the allegations, his group’s flagship company had to delay the issuance of additional shares due to the deep fall in the share price of the entire group, which was vital to the Adani Group’s debt coverage.
Gautama Adani lost more than $130 billion in the market value of his holding in just a few days. He also lost some of his personal wealth. To help him came the royal family’s investment fund from Abu Dhabi International Holding Co. IHC bought the group’s shares for $400 million. That didn’t change the situation, however – investors in the Adani group’s IPO have filled only 3% of the order book so far.
A few days later, the quotes on the group’s stocks and bonds rose slightly – some of the group’s companies have done very well in the past years. But investors no longer knew what to believe. The final blow to Adani’s stock prices came from Norway’s state wealth fund, the world’s largest investor. On February 10, it sold all its shares of the Adani conglomerate, amounting to $200 million.
The Adani empire, relying on the support of the country’s president, invested mainly in infrastructure projects – new roads and railways, airports were built. But as Hindenburg sees, the return on capital in this area is low.
Moral: You can build your business empire for decades, but if someone’s curious mind finds attempts to embellish the truth and mislead investors in your news, you lose everything. By the way, Gautama is one of the names of Buddha, whose teaching calls for giving up everything (including money) in order to save your soul.
Therefore, do not deceive your investors who entrust money to businessmen.
The author expresses his personal opinion, which may not coincide with the editors’ position.