Your financial advisor genius been telling you to buy emerging market ETFs or stocks? Remember Dickens and then read Shuli Ren: "Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result MISERY!" Or even, "We spent as much money as we could, and got as little for it as people could make up their minds to give us." Gautam Adani’s wealth wipeout has few parallels. His industrial empire lost about $112 billion, or roughly half of its market value, just seven trading days after New York-based Hindenburg Research issued a bearish report calling the Adani Group “the largest con in corporate history” — allegations the company strenuously denies. Adani’s rapid unwind has surprised many. But this is not the first time emerging Asia’s conglomerates have been accused of poor governance, lofty valuation and even loftier debt piles. The likes of China Evergrande Group survived short seller attacks for years — until Beijing put its foot down. So why is Adani so vulnerable? In some ways, Adani is even worse than Evergrande, which, at its prime, accrued around $100 billion net debt, five times Adani’s level. In recent years, the powerful Indian mogul managed to attract blue-chip investors that specialize in ESG or low-risk corporate debt. But on the flip side, Adani has an investor base that is more skittish around market sentiments, and that means the selling pressure is a lot higher. For many years, those who bought into Evergrande knew exactly what it was — an overleveraged empire that offered attractive yields and was perhaps becoming too big to fail. As such, those who purchased the junk-rated developer’s bonds tended to be hedge funds or private banks’ wealthy clients, who generally have a bigger risk appetite and tolerance than traditional asset managers. Not so for Adani Group. Believe it or not, Adani Ports & Special Economic Zone Ltd. — the group’s biggest issuer in the dollar-bond space — is rated at the lowest tranche of the investment grade. So are Adani Electricity Mumbai Ltd. and Adani Transmission Ltd.  Ultimately, Adani is a typical emerging market conglomerate. It is a family-run business that is not shy about cementing control and fueling expansion with debt. It runs the risk of poor governance, but also offers the potential to fast-track India into a modern-day South Korea. Yet it is at a stage of development that is too risky and opaque for blue-chip investors, who nonetheless had bought in and are now panicking. #india #mumbai #business #china #money #debt #adani