Winning Bizness Desk
Mumbai: Gautam Adani, the owner of the Adani Group, is currently in deep trouble as a report given by the American short selling company Hindenburg on January 24 has sent shockwaves. Shares of Adani Group have fallen sharply after this report and in just 8 to 9 days, the stock has lost 45 percent. 10 days ago Gautam Adani was the fourth richest person in the world and now he has slipped to number 21, besides losing his personal wealth.
It started in 1977
It was November 1977 when Dhirubhai Ambani decided to list his company Reliance in the stock market and Reliance issued around 28 lakh equity shares at Rs 10 per share. Reliance shares were sold through the IPO and a year later in 1978, the share price of Reliance Company increased 5 times to Rs 50. Then in 1980, the price of one share went up to Rs 104 and In 1982, it rose 18 times to Rs 186 a share of Reliance. In 1982, as the share price of Reliance skyrocketed, influential brokers in Kolkata started targeting Reliance. These brokers were called bears. They repurchase the stock at a fall in price and make a profit. This is what the Hindenburg is doing today.
Brokers started short selling in 1982
On March 18, 1982, brokers started short selling of Reliance shares, which is happening in Adani's shares after the Hindenburg report. Hindenburg himself has admitted to short selling Adani shares. Dhirubhai Ambani was informed that stock market brokers sitting in Kolkata were depressing the prices of Reliance shares. After this, without a moment's delay, Ambani contacted the leading bull brokers around the world. Now many leading brokers jumped into the stock market in favor of Ambani. On the one hand, the brokers sitting in Kolkata were selling shares indiscriminately. On the other hand, Ambani supporters were buying shares of Bull Dalal.
Dhirubhai did this funda
The stock closed at Rs 125 at the end of the day on the evening of March 18. Dhirubhai had received input that a broker in Kolkata was selling stocks for a week. Dhirubhai focused on making sure that the share price should not fall too much during the week. Due to this, Kolkata brokers had to either buy shares at a higher price. In three days, 11 lakh shares of Reliance were sold and about 8.5 lakh shares were bought by Ambani's brokers. Now the brokers of Kolkata were aback because the share price rose above 131. In other words, brokers got completely trapped in Ambani's net. Ambani wanted to teach a lesson to the brokers sitting in Kolkata, that's why he stood his ground for 3 days.
What is the way ahead for Adani now?
Now the question is, if someone is playing the short seller game with Gautam Adani, can they turn the game around? What Dhirubhai Ambani did 40 years ago, Gautam Adani can do today. Can Adani teach the same lesson Dhirubhai Ambani taught the brokers of Kolkata?
