About Sandeep Bhalla

An aspiring human, author by choice, lawyer by profession.

Is Hindenburg doing a hit job on Adani?

Gautam Adani, the third richest man in the world about a week ago has slipped to 17th position thanks to a so called ‘research paper’ published on the site called hindenburgresearch.com. Generally the is no big deal and such paper do gain a traction in sometime but in this case the very next date stock of Adani began to fall. In other words, there was an accumulation of stock and concerted action around the globe to make it happen. I will explain this later. Now the problem is that who did the research is not known. The paper is written in an English which may be called ‘Indian’ English. The diction seems to be from West Bengal and lo and behold, it quotes a former investment banker who is now a member of Parliament. Her name is Mohua Mitra. Here is she raising voice in Parliament without giving prior notice:

This is her picture:

According to following youtuber, she and other ex-employees of Morgan were involved in the conspiracy to short sell the shares of Adani Group.

But all this doesn’t matter. The reason is that just a few employees of a financial firm can not do it without substantial capital and membership of stock exchanges. Above all it requires huge amount of money to pull this off.

The operation:

The Hindenburg report wants people to believe that it triggered the fall. That is a smoke screen. This publication intends to justify The Operation to short sell Adani shares. It involves three transactions and months planning. First part is to buy large number of shares of Adani. So long there are no sellers there is no fall in prices. Now selling shares continuously will entail losses. Huge losses. The second transaction involves short sale of future which would become profitable but would only set off the losses from sale of shares. Now to make it profitable, either calls are written which are expensive as it requires huge margins or the puts at ‘out of money strike price’ are bought and encashed.

Again this billions of dollar operation can not be operationalised by few individuals. Institutions have to be involved.

A disclaimer:

I had always felt that Adani shares are overpriced as investor are over-enthusiastic. Therefore I had no holding in Adani group shares. In fact I sold the Cement Shares of the company after it was acquired by Adani, with a little profit. But after this fiasco, I am buying Adani on lower circuit and averaging it gradually. Thus I have a financial reason to be optimistic. It is a conflict of interest. But how did I reach this conclusion?

Is Adani a Con Man?

In this complex world of finance, there is a con man on every corner. But let me explain that ability to sell shares at an overprice is no con trick. It is perfectly legal. Look at the shares of Zomato an PayTM at the time of IPO and now. Manipulation of price can not be proved unless an exact detail of transactions is given to regulator and it is accepted. When investing, I look at three things

  1. The Business Model: Tech companies have worst business model. Technology becomes obsolete overnight. That is not good for long term investing. But ports, cement steel and sugar etc. are always there. We can not survive without it. We are surviving without Orkut and may survive without FaceBook in future.
  2. 2. Dividend Payout or Valuation: This I about payout method. Some share pay by bonus or rights shares or others pay by dividend. I prefer dividend but may go for overpriced shares if there is a track record of bonus etc. Adani had none earlier but now we can expect an issue of rights, once dust settles down.
  3. Assets: What assets does Twitter has? A building? Except the algorithm, it has no tangible asset at all. I will not invest in such company by long pole. More so when it does not have operational profits. Adani group has huge tangible assets. The Ports, factories on huge lands, leases etc. There I a saying that dead elephant is sold at quarter million more than the alive elephant which is sold for a bare million. The reason is that dead elephant’s bones are sold for more. Similar is the case of a company. Tangible assets can be sold.

Now the allegations against Adani are generic in nature. Th allegations are made for the sake of allegations. There is no demonstration of any loss to any company or any overpricing of assets. Some allegations are so ludicrous that they make remaining allegations as non serious. It says that an auditor certifying the audit report is too young being below the age 29 years.

Doe anonymous author of the report knows that according to the Census 2011, over 58.3 per cent of the India’s population is aged 29 years or below. If you throw a stone randomly on a cloud it is almost impossible to hit any body above aged 50 because they avoid crowds.


The guilty party is SEBI. This so called report is a smoke screen to justify the manipulated bear hammering. They can do it because a small investor is prohibited to do it. The three scrip formula given above require about one million rupee per lot to operationalise it. One could initiate it in one third cost but price fluctuation would require more money to be pumped into it.

SEBI has made different lot sizes for derivatives and cash segments which has no basis. It reasons that it will prevent speculation. Why have a derivative market at all? Lot size to purchase share is one. But for future and derivatives it is pegged at about bundle size equivalent to 2 lacs (200,000) rupees. If the lot size is brought at par, small investor will stop selling short as it can write call without margin and keep covering losses on the share holding. The premium on calls will cover the loss and there would be no panic selling. After all majority of holding is in the hands of retail investors and institutions which are not part of bear cartel.

Hope SEBI wakes up and free the derivative market for retail investors. Just one move can stop panic in small investors.

As regards the allegations against Adani, here is a YouTube video explaining it and the reply of Adani. BTW this youtuber is also quite young.

Highlights of Union Budget of India 2023-24

Union Finance Minister of India, Nirmala Sitharaman presented the Union Budget 2023, the fifth budget of Modi 2.0 on Wednesday (today). In the last full-fledged Budget before the general elections next year, the Nirmala Sitharaman said that the Indian economy is on the right path and heading towards a bright future. This Budget is the first in Amrit Kaal, she added.


1. EPFO Numbers doubled to 27 crores
2. Agriculture accelerator fund to boost startup in Agri sector. Special scheme to boost fisheries
3. 38,800 teachers will be employed in 3.5 lakh Eklavya tribal school.
4. Capital outlay of Rs. 2.40 lakh crore for Railways.
5. 50 New Airports and Heliports to be made.
6. Rs. 10,000 crore for urban infra fund every year
7. Rs. 75,000 crore for 100 transport infra projects
8. 3 Centers of Excellence for “Artificial Intelligence” will be set up.
9. KYC procedure to be simplified. PAN to become common business identifier.
10. Scope of Digi locker to be increased.
11. More than 39,000 compliances reduced. Jan Vishwas Bill to amend 42 laws
12. Rs. 35,000 crore for Energy transmission
13. 10,000 bio-input research centres to be set up.
14. 30 Skill India International centres to be set up.
15. NFIR (National Financial Information Registry) to be launched for financial strategy.
16. Reducing cost of MSME Credit by 1%. Infusion of Rs. 9,000 crore in corpus for MSME credit.
17. ‘Mahila Samman Bachat Scheme’ for Women for Rs. 2,00,000 @ 7.5%
18. SCSS enhanced from 15 lakh to 30 Lakh.


1. Promote domestic manufacturing and exports.
2. Tax exemption on Capital Goods and Lithium batteries.
3. Mobiles, camera lenses to become cheaper.
4. Gold, Silver & Diamonds, cigarettes, imported rubber to get expensive.
5. Enhanced limit for 3 crore and 75 lakhs for presumptive taxation with upto 5% Cash Transactions.
6. Higher TDS limit of RS. 3 cr for Cooperatives for Cash Withdrawal
7. New IT Return Form for easier filing.
8. 100 Joint Commissioners to be appointed for disposal of small appeals.
9. TDS reduced on EPF withdrawal from 30% to 20% without PAN Cases.
10. Section 54 and 54F to be amended to cap
11. Rebate limit increased to 7 lakh(5 lakh earlier) in *New Tax Regime*.
12. Number of slabs reduced from 5 in *New Tax Regime*.
13. Only 5% Tax(effective tax rate) on Individual’s Annual income of 9,00,000 only to pay Rs. 45,000 as tax under the *New Tax Regime*.
14. Only 10% Tax(effective tax rate) on Individual’s Annual Income of Rs. 15,00,000 only to pay Rs. 1,50,000 as tax under the *New Tax Regime*.
14. Salaried class and pensioner: Standard Deduction introduced in *New Tax Regime* for Income under salary greater than 15.5 lakh.
15. Highest tax rate 42.74 % reduced.
16. Propose to reduced Higher surcharge rate from 37 % to 25% in *New Tax Regime*.
17. Leave Encashment: Limit increased from Rs. 3,00,000 to Rs. 25,00,000.

Good Bye 2022. What to look forward in 2023.

Happy New Year 2023

The year 2022 has ended and it is a matter of relief. For past many years end of year comes with the relief that it is over but unfortunately that is not happening. The recent developments in China shows that the pandemic may not be over as yet even though in India, it is almost normal now. Let’s look back at the year 2022.


During the year, the Reserve Bank of India has added 65.11 tonnes of gold to its pile. This is the highest purchase in a single fiscal year, second only to the 200 tonnes of gold bought in FY10 from the International Monetary Fund (IMF). It is seen as an attempt to diversify away from US dollar. RBI has launched Digital Rupee and as also started International trade in Rupee, starting with Russia and Sri Lanka.

While inflation in India is at modest 6%, the entire world has experienced inflation in double digit something the western economies have not seen for several decades. Rapid increase in repo rate by Central Banks did not prove very effective in controlling inflation but it may cause recession. We have to wait to see if it happens and its domino effect on the world. If Pandemic was the cause for the economic turmoil, Ukraine war acted as a booster to the problems.

Ukraine War:

Maharashtra: After the castling, BJP is going for Shiv Sena.

Maharashtra reminds me of Vladimir Putin’s Prime Minister between 2008 to 2020. His name was Dmitry Anatolyevich Medvedev. How many people remember that Medvedev was the President of Russia between 2008 to 2012 and in this period, Vladimir Putin was his Prime Minister. Again in 2012, Putin became the President and Medvedev became the Prime Minister.

A similar arrangement has been made in Maharashtra. Devendra Fadnavis is Deputy Chief Minister and Eknath Shinde is the Chief Minister. The reason is rather obvious.

First, with this castling, Shinde can ask for nothing more. This is the end of the bargain. This also shows to Thakrey that the problem was his being in office and it was not about Fadnavis in the office of CM.

Secondly and more importantly, Shinde as Chief Minister, will attract the rest of the party workers like Magnet. He will go around visiting City after city, seeking support at the ground and then file a claim on the party i.e. Shiv Sena with the Election Commission. This is the jugular vein of the political capital of Thakrey.

Shinde has a big task ahead and Fadnavis will run the Government for him.

Surprisingly, Thakrey is literally sitting like ducks. With his serious health problems and arrogance disproportionate to his stature, he can’t match the street fight. Not beyond Mumbai in any way.

Today’s vote of confidence in the house is a mere formality. With the success in election of speaker with 167 votes in the house of 288, it will be a cakewalk for ruling combine in the house today.

People can start writing political obituaries of Thakrey. The father and the son and his recent benefactor ‘Kaka’ who led him to this day.

If you disagree with my chess analogy, listen to what Chagan Bhujabal, leader of NCP has to say about it:

Teesta Sitalwad: arrest of an activist who is descendant of a legendary family.

Teesta Sitalwad has been arrested last week by Anti-terror squad (ATS) of Maharashtra from her residence in Juhu, Mumbai. Her arrest was such a big event that the United Nation spokesperson expressed concern and in reply a spokesperson of Foreign Affairs of Government of India had to issue following statement:

Foreign Ministry spokesman Arindam Bagchi said that we have seen a comment regarding legal action against Teesta Setalvad and two other persons by the Office of the United Nations High Commissioner for Human Rights. The comments are completely inappropriate and set an example of interference in the independent judicial system of India. Bagchi further said that India works strictly against violation of law as per judicial procedures. Labeling such legal actions as harassment for the sake of activism is misleading and unacceptable.

The question arises as to who is Teesta Sitalwad?

She was destined to be a lawyer, like her father and grandfather but she left law and passed out as a journalist. He credentials as a journalist remained foggy but after 2002 she emerged as a professional public interest litigant. Her case would eventually land up in Supreme Court before a particular judge and she would get some relief or the other. Few years back she was arrested on the charge of misappropriation of money from Charities created for victims of 2002 riots in Gujarat but she was released on bail as it was granted on an alleged phone call from Kapil Sibal.

The Sitalwad Family:

Like many in lime lights of the media, the Sitalwad Family has an illustrious past.

Her great great great grandfather, Ambashankar Setalvad (1782–1853) worked for the East India Company.

Her great great grandfather Harilal Ambashankar Setalvad (1821–1899) was awarded the title of Rao Sahib by the British for his loyalty to the crown and in the process he made substantial wealth.

‘Sir’ Chimanlal Harilal Setalvad (1864–1947) was one of the
member of Hunter Commission which gave ‘clean chit’ to Reginald Dyer for Jallianwala Bagh Massacre in 1919. He was awarded title of ‘Sir’ in 1919 & appointed a Knight Commander of the Order of the Indian Empire (KCIE) in 1924 by the British. He was also a family friend of Jawaharlal Nehru.

Motilal Chimanlal Setalvad (1884–1974) was India’s first & longest serving Attorney General (1950–1963).  He helped Nehru in imposing a tax on salt from retrospective effect in the name of cess. Courts had struck it down. (Remember slat agitation of Gandhi called Dandi March?) He also helped Nehru in keeping Rowllet Act in Constitution of India as article 22 by strongly defending it in courts.

Atul Motilal Setalvad (1933–2010) was a left leaning  Mumbai based lawyer with a rather not so illustrious a career but had left behind aan ancestoral home in Juhu, Mumbai which has a personal garden of 3 acres. Nobody, even the richest men of India namely Ambani and Adani enjoy this luxury in the heart of Mumbai.

Teesta Javed Setalvad (1962– ) is a journalist cum activist who married Javed Anand who is also an activist cum journalist. Presently she is under arrest for forging affidavits, manipulating litigation and abuse of legal process for 16 long years. The matter is under investigation.

Few other British loyalists:

Sitalwad is not alone. The British left behind their loyalists who shifted loyalty to the Nehru family immediately after 1947 and their descendants continue to do so thereafter.

Kunj Bihari Thapar gave a saropa to Governor Dyer who was the Governor of Punjab when Jalainwalan Bagh massacre took place. His illustrious descendants include General Thapar who lost 1962 war to China. Romilla Thapar and Karan Thapar are the other descendants continuing the legacy of Raj.

Khuswant Singh was press secretary of Nehru who was fired after a picture of Lady Mountbatten in night gown kissing good bye to Nehru in London, appeared in Newspapers. His father Sir Sobha Singh became a British loyalist who was awarded acres of land in and around Delhi at throw away prices after he testified against Bhagat Singh and B.K.Dutt, the freedom fighters in courts to ensure their hanging till death. Khuswant Singh defended his father as he spoke the truth.

There are many such illustrious British loyalists who joined Nehru and his descendants in doing what the British did to India namely LOOT away wealth. British looted 45 trillion dollars. So much so they refused to pay what they owed for war supplies in 1947. It was about 2 billion pounds. Nehru never mentioned it.

Arrest of Teesta could be a trend setter that these dynasts in media who represent British legacy of personal loyalty and not merit may soon become a thing of past. It is important that this happens as meritocracy is not possible with dynasties of loyalists.