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<ul class="summary-list"><li>Taiwan Semiconductor Manufacturing Company just reported a 54% rise in third-quarter net profit.</li><li>TSMC's growth was driven by strong demand for artificial intelligence technology.</li></ul>Chip giant <a target="_blank" class="" href="https://investor.tsmc.com/english/encrypt/files/encrypt_file/reports/2024-10/d00bfb55ffe01e36f56863f975e88d827f9943e8/3Q24EarningsRelease.pdf">Taiwan Semiconductor Manufacturing Company</a> just reported strong growth, thanks to continued enthusiasm for artificial intelligence — even amid persistent questions over the <a target="_blank" class="" href="https://www.businessinsider.com/ai-return-investment-disappointing-goldman-sachs-report-2024-6">return on investment</a> from the technology.TSMC, the world's largest contract chipmaker, reported a forecast-beating 54% rise in third-quarter net profit to a record 325.3 billion New Taiwan Dollars, or $10.1 billion. Analysts had expected the company to post a profit of 300.2 billion New Taiwan dollars, according to LSEG SmartEstimate.The chipmaker's third-quarter revenue rose 36%, to $23.5 billion, which also beat its previous forecast of $22.4 billion to $23.2 billion. The company is forecasting fourth-quarter revenue of $26.1 billion to $26.9 billion — up from $19.6 billion in the same period last year.The Taiwanese company's blockbuster results came after Dutch chip equipment maker ASML — a supplier to TSMC — reported guidance on Tuesday that disappointed investors and triggered a sell-off in chip stocks.One of first questions at TSMC's Thursday analysts' earnings call was whether there's an AI bubble.CC Wei, TSMC's chairman and CEO, said that the demand for AI "is real."Wei said TSMC's experience in using AI and machine learning in its fabs and R&amp;D operations has enabled greater productivity — a tangible return on investment."We cannot be the only one company that has benefited from AI applications," said Wei, adding that the demand trend has just started.TSMC's share price in Taiwan closed 0.96% lower on Thursday, but the stock is up nearly 75% this year-to-date and near its all-time high.TSMC's strong Q3 results show the AI spending party is still on, despite fears to the contrary.As Goldman Sachs asked in a June <a target="_blank" rel=" nofollow" href="https://www.goldmansachs.com/intelligence/pages/gen-ai-too-much-spend-too-little-benefit.html">report:</a> "Will this large spend ever pay off?"In August, AI chipmaker <a target="_blank" class="" href="https://www.businessinsider.com/nvidia-q2-earnings-ai-investors-expectations-2024-8">Nvidia</a> sparked jitters in the market when its earnings beat estimates but did not meet lofty market expectations amid nervousness over the return on AI investments.TSMC investors appear to be convinced immediately after its earnings call. <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/tsm-stock">TSMC</a> American Depositary Receipts on the New York Stock Exchange jumped over 7% in after-hours trade following its earnings announcement.<h2 id="92427aba-6a9e-4936-bd87-7b6ffc4a688e">ASML: China demand is normalizing from a high</h2>TSMC's upbeat results contrasted with those from <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/chipmakers-tumble-asml-guidance-semiconductor-nvidia-chip-growth-2024-10">ASML.</a>On Tuesday, the company slashed sales guidance for 2025, sending its stock down 16% in its largest single-day drop in 26 years. The stock extended losses on Wednesday to close 5.1% lower and was 7% lower year-to-date."While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," Christophe Fouquet, the CEO of ASML, said in a <a target="_blank" class="" href="https://www.asml.com/en/news/press-releases/2024/q3-2024-financial-results-dd3ac76a9d4d0f8c">statement on Tuesday.</a>On Wednesday, Roger Dassen, ASML's CFO, said US export restrictions are also expected to contribute to lower sales going forward."We all read newspapers, right? We all see that there is speculation around export control. That is a driver for us to take a more cautious view on the China sales," said Dassen.China is an important ASML customer, accounting for around a quarter of its total net sales <a target="_blank" class="" href=" https://edge.sitecorecloud.io/asmlnetherlaaea-asmlcom-prd-5369/media/project/asmlcom/asmlcom/asml/files/investors/financial-results/a-results/2023/2023-annual-report-based-on-us-gaap-m7rf6.pdf">in 2023</a> — even though ASML has never sold its most advanced chip machines to Chinese customers, due to existing export restrictions.China has been <a target="_blank" class="" href="https://www.businessinsider.com/china-imports-trade-war-biden-tariffs-chips-demand-economy-2024-8">stockpiling tech products,</a> including ASML machines, in anticipation of more export restrictions. But ASML still expects sales to China to drop to one-fifth of its total revenue next year, which Dassen said is "normal."It's "entirely reasonable" for ASML to have some adjustments to its guidance because its guidance range for 2025 was made during its Investor Day in 2022, Andy Li, a senior analyst for semiconductors and tech at CreditSights, told Business Insider.But it doesn't mean AI demand is fizzling."I don't think you can view this as having meaningful read-through to near-term demand for AI, though order growth expectations for ASML were a bit too aggressive and valuation stretched," said Li.

Chip giant TSMC reports blockbuster results even as questions over AI mania loom 

<ul class="summary-list"><li>Beijing has accused Evergrande of inflating revenue by $78 billion in 2019 and 2020.</li><li>Regulatory authorities have fined Evergrande's founder and banned him from the securities market for life.</li></ul>It just seems to get worse and worse for <a target="_blank" href="https://www.businessinsider.com/china-evergrande-property-real-estate-crisis-debts-collapse-what-happens-2024-2">fallen Chinese real-estate giant Evergrande.</a>The developer, at one time China's largest, is in <a target="_blank" href="https://www.businessinsider.com/evergrande-ordered-liquidate-china-real-estate-property-crisis-winners-assets-2024-1">liquidation</a> after several years in a <a target="_blank" href="https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9#">debt crisis.</a>Now, it's being accused of fraud, too.The China Securities Regulatory Commission, or CSRC, has accused Hengda Real Estate — Evergrande's flagship onshore unit in China — and its founder Hui Ka Yan, also known as Xu Jiayin, of inflating its revenue by 564 billion Chinese yuan, or $78 billion, in 2019 and 2020, according to an <a target="_blank" href="https://www.szse.cn/disclosure/listed/bulletinDetail/index.html?fcedf251-216f-4503-8189-68e7fcf5e540&amp;">exchange filing released on Monday</a>. It also issued bonds based on the falsified results, the CSRC alleges.Evergrande did not immediately respond to a request for comment from Business Insider.To understand the scale of the alleged $78 billion fraud, consider the following two cases, as <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-19/china-accuses-evergrande-of-78-billion-fraud-among-worst-ever">Bloomberg</a> pointed out. In 2020, Chinese coffee giant <a target="_blank" href="https://markets.businessinsider.com/news/stocks/luckin-coffee-plans-return-us-stock-market-300-million-fraud-2022-1">Luckin Coffee</a> inflated its revenue by $300 million. <a target="_blank" href="https://www.google.com/search?q=enron+fraud+busiessinsider&amp;sca_esv=856a53dbc632d9c9&amp;rlz=1C5GCEM_en&amp;ei=7SH5ZYvqG83BjuMPz-qggAI&amp;ved=0ahUKEwjLlMavy_-EAxXNoGMGHU81CCAQ4dUDCBA&amp;uact=5&amp;oq=enron+fraud+busiessinsider&amp;gs_lp=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&amp;sclient=gws-wiz-serp">Enron</a> pumped up its profits by $600 million in 2001. Both Enron and Luckin rank among the <a target="_blank" href="https://money.usnews.com/investing/articles/biggest-corporate-frauds-in-history">biggest fraud cases in history</a>, and neither comes close to the scale of the allegations levied against Evergrande.The CSRC said Hui was responsible for organizing and falsifying financial information using means that were "particularly egregious." The authority slapped Hui with a 47 million yuan fine for his violations and banned him from the securities market for life.The CSRC also imposed a 4.2 billion Chinese yuan fine on Hengda Real Estate.Other former Hengda Real Estate executives, including its ex-CEO and ex-CFO, were also hit with fines and market bans.These mark the latest developments in the downfall of Hui, who was put under <a target="_blank" rel=" nofollow" href="https://www.bloomberg.com/news/articles/2023-09-27/evergrande-s-billionaire-chairman-hui-is-under-police-surveillance">police surveillance</a> in September. He has also <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-01/luxury-house-linked-to-evergrande-s-hui-put-on-sale-in-hong-kong">lost three mansions</a> in The Peak, Hong Kong's prestigious neighborhood.Bejing's crackdown on Evergrande could be a signal to other developers to get their acts together, said an analyst."The CSRC fines may serve as a warning to owners of other defaulted developers that failing to collaborate with authorities over debt restructuring could result in severe consequences," Zerlina Zeng, the head of East Asia corporates at CreditSights, a research firm, told Business Insider.Zeng added that the fines are unlikely to impact Evergrande's liquidation process because Hui is unlikely to pay using his personal wealth anyway.<a target="_blank" href="https://markets.businessinsider.com/news/bonds/china-property-debt-crisis-two-thirds-developers-default-country-garden-2023-9">Many Chinese property developers</a> have defaulted on their debt in the past several years, and there are fears that China's property crisis could spill over into the broader domestic, causing contagion in the <a target="_blank" rel="" href="https://www.businessinsider.com/china-economy-xi-jinping-evergrande-debt-american-world-fallout-2021-10">global economy.</a>Trading in <a target="_blank" href="https://markets.businessinsider.com/stocks/egrnq-stock">Evergrande shares</a> on the Hong Kong Stock Exchange has been halted since January 29 when it was ordered to be liquidated.

Beijing says Evergrande and its tycoon founder committed a $78 billion fraud. That would rank it as one of the biggest financial frauds ever.

<ul><li><keyword id="1402930" type="General" weightage="50" keywordseo="state-discom" source="Orion">State discom</keyword> legacy dues to <keyword id="3278843" type="General" weightage="80" keywordseo="gencos" source="Orion">gencos</keyword> have more than halved from ₹1.38 lakh crore last June last year to ₹61,000 crore as of 24 July 2023.</li><li>This was due to the introduction of a late payment scheme which penalizes discoms for delaying payments.</li><li><keyword id="14181100" type="General" weightage="50" keywordseo="green-energy-open-access-rules" source="Orion">Green Energy Open Access Rules</keyword> also reduced the minimum offtake threshold for consumers.</li><li>Commercial &amp; industrial consumers can also demand green power from state discoms voluntarily. </li></ul>India’s green power generators have been gaining from increased payment discipline amongst state distribution companies or discoms after the government introduced late payment surcharge scheme (LPS) last year. That’s good news for renewable power generators like Greenko, ReNew, <keyword id="45417" type="General" weightage="50" keywordseo="adani-power" source="Orion">Adani Power</keyword> and more who will now be assured of faster payments. The scheme has made good progress with payment discipline amongst state distribution companies as state discom legacy dues to gencos have more than halved from ₹1.38 lakh crore in June last year to ₹61,000 crore as of 24 July 2023, says a report by CreditSights. Also, Power Finance Corporation (PFC) and <keyword id="64468" type="General" weightage="50" keywordseo="rural-electrification-corporation" source="Orion">Rural Electrification Corporation</keyword> (REC) have been funding various state governments to help clear these dues. In the last one year, both these public sector companies (PSUs) have given multibagger returns to their investors — at 162% and 154% respectively. Most power generators with a renewable energy portfolio have also been gaining ground. What’s the scheme? As per the scheme, state discoms who delay their payments beyond the default trigger date, will lose short-term power access. Apart from that, progressively these restrictions would increase each month for medium and long-term power access as well for each month of non-payment. The scheme is a game changer for the renewable power generators who are stuck with large capex costs along with delayed payments. “It (the scheme) reduced the counterparty credit risks posed by the state discoms. Not only would the state discoms have to clear their sizable backlog of owed dues to the gencos, they would also be more disincentivized to delay payments to the gencos given the punitive penalties,” said the CreditSights report. Gencos who are able to receive timely payments can improve their account receivables, working capital positions and cash flows. “Investor sentiment in the sector has also improved materially post the LPS scheme, based on our discussions with market participants,” CreditSights observed. More green consumers In the Union Budget 21-22, eligible Indian states were granted additional borrowing limits of 0.25% - 0.5% of annual Gross State Domestic Product (GSDP). This was applicable over a four-year period from FY22-FY25. Some of these benefits have flowed to the state discoms. Till date, ₹66,400 crore of additional borrowing permissions have been granted to the states — for financial support to the state discoms, the report said. The government also came up with Green Energy Open Access Rules in June last year, which helped improve offtake of renewable power. It reduced the renewable energy minimum offtake threshold of consumers from 1 MW to 100 kW. It also allows commercial &amp; industrial consumers to demand green power on a voluntary basis from state discoms. It also provided clarity on final tariffs charged to consumers of renewable energy, bringing in more transparency into the system. These new rules will drive better transparency, access and stronger demand for renewable energy across the smaller C&amp;I customers, CreditSights opines. The Indian government has set an ambitious target to convert 40% of total installed power capacity green by 2030. That means India would have to add 250 GW of renewable energy capacity between 2023-2027 – and it has been working actively to clear bottlenecks along the way, most of which is ensuring these green power producers are paid on time.

Indian green power generators are gaining from more takers & timely payments

<keyword id="99389" type="General" weightage="20" keywordseo="vedanta-resources" source="Orion">Vedanta Resources</keyword> Limited (<keyword id="28423" type="DOMAIN" weightage="100" keywordseo="vedanta" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="vedanta" meta.entityname="Vedanta Ltd." meta.entityid="13111" meta.seoname="vedanta-ltd">Vedanta</keyword>), the parent company of Mumbai-listed mining giant <keyword id="11969166" type="DOMAIN" weightage="100" keywordseo="vedanta-ltd" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="vedanta ltd" meta.entityname="Vedanta Ltd." meta.entityid="13111" meta.seoname="vedanta-ltd">Vedanta Ltd</keyword>, on Wednesday said it has further repaid USD 400 million of loans, cutting gross debt to USD 6.4 billion. In a statement, the firm helmed by billionaire <keyword id="6354819" type="General" weightage="20" keywordseo="anil-agarwal" source="Orion">Anil Agarwal</keyword> said it "has paid all its maturing loans and bonds due in May and June 2023.. "As such, gross debt has further reduced to USD 6.4 billion, a USD 3.3 billion reduction since Vedanta announced its deleveraging ambition in March 2022," it said. CreditSights, a Fitch Group firm, had last week stated that it saw lower refinancing risk for Vedanta Resources Ltd's (VRL) near-term debt maturities on a new USD 850 million loan refinancing. "Looking ahead, while we estimate more funds need to be raised to fully fund VRL's estimated USD 2.1 billion of FY24 (April 2023 to March 2024 fiscal year) debt refinancing needs (USD 850 million covered, implying a gap of USD 1.25 billion), we think VRL still has multiple funding avenues to tap onto. These include share pledges and dividend upstreaming," it had said. The firm had last on April 24 stated that it had cut gross debt to USD 6.8 billion after repayments. "Vedanta is targeting further debt reduction during the balance of FY24, and ultimately intends to lower gross debt towards zero," the company statement said Wednesday. "This will be aided by our expectations of robust demand, particularly in India, coupled with strong operational performance from our world-class asset base.. Vedanta's gross debt as of today stands at USD 6.4 billion, down from USD 6.8 billion at the end of April 2023, USD 7.8 billion at the end of March 2023, and USD 9.7 billion at the end of March 2022. It however did not indicate a timeline for reaching zero gross debt. "We remain aware of refinancing risk on VRL's USD 4.1 billion debts due in FY24, for which VRL will likely have to rely heavily on external fundraising for a USD 2.1 billion refinancing and an additional USD 950 million to plug a funding gap. "At this point, we would still lean towards VRL being successful at tying up its USD 2.1 billion of fundraising, given VRL's track record of 'going to the brink and succeeding', recent debt reductions, recent fresh fundraising efforts and that we think various alternative funding channels remain open for VRL, despite the tighter bank funding conditions," CreditSight had said. These avenues include pledging of promoter stake in the main operating company Vedanta Ltd and further dividend upstreaming from operating companies. "We also think VRL's timely debt repayments thus far and recent refinancing progress could support lending sentiment," it had said. "We caution of execution risk: VRL's refinancing of the USD 1-1.25 billion loan is not finalised yet and a lack of progress, a failure of refinancing talks, or its inability to tie up the loan for late-FY24 pose downside risks to our recommendation." SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/fintech-unicorn-taxfix-lays-off-120-employees-to-cut-costs/articleshow/100646092.cms">Fintech unicorn Taxfix lays off 120 employees to cut costs</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/delhi-metro-launches-whatsapp-based-ticketing-service-on-airport-line/articleshow/100646250.cms">Delhi Metro launches WhatsApp-based ticketing service on Airport Line</a>

Vedanta Resources pays $400 million debt, borrowings down to $6.4 billion

<ul class="summary-list"><li>Country Garden, a massive Chinese property developer, missed interest payments on two dollar bonds this week.</li><li>"Any default would impact China's housing market more than Evergrande's collapse," an analyst said.</li></ul>Two years after Evergrande's default triggered mayhem in the global markets, China's ailing property sector is teetering on the brink of another crisis.On Tuesday, Country Garden, the country's biggest private-sector developer by sales, <a href="https://www.reuters.com/markets/asia/chinas-country-garden-missed-two-dollar-bond-coupon-payments-2023-08-08/" target="_blank" rel="noopener nofollow">missed interest payments on two US-dollar-denominated bonds</a>.The company now has a <a href="https://www.reuters.com/markets/asia/latest-china-developer-debt-woes-could-spur-policy-aid-industry-downbeat-2023-08-09/" target="_blank" rel="noopener nofollow">30-day grace period</a> to avoid an official default. <a href="https://www.bloomberg.com/news/articles/2023-08-09/country-garden-shows-even-china-s-once-mighty-builders-at-brink">On Wednesday</a>, Kristy Hung, a Bloomberg Intelligence analyst, wrote: "Any default would impact China's housing market more than Evergrande's collapse as Country Garden has four times as many projects."A debt crisis at Country Garden will have a far-reaching impact on China's housing market sentiment and could significantly weaken buyer confidence on solvent private developers, she added.The developer built over <a href="https://www.bnnbloomberg.ca/china-s-property-crisis-reaches-biggest-builder-country-garden-1.1708093" target="_blank" rel="noopener noreferrer">3,000 housing projects</a> all across China. This compares to <a href="https://www.reuters.com/world/china/construction-has-resumed-95-china-evergrande-projects-unit-says-2022-04-02/">over 700 projects Evergrande has across China</a>.The size of the debt tells a different picture. Evergrande's total liabilities amounted to <a href="https://www.reuters.com/markets/asia/evergrandes-overdue-results-show-steep-losses-market-eyes-liquidity-update-2023-07-17/">2.4 trillion yuan</a>, or about $333 billion last year. It eclipses Country Garden's debt which was $200 billion at the end of last year. However, it's the scale of Country Garden's projects that is a big warning signal for the Chinese real estate sector and the wider economy. <h2>What is Country Garden? </h2>Hong Kong Stock Exchange-listed Country Garden has been one of the few major private developers <a href="https://edition.cnn.com/2023/08/09/economy/country-garden-china-property-default-intl-hnk/index.html#:~:text=1%20by%20sales%20last%20year,province%20on%20October%2031%2C%202021." target="_blank" rel="noopener">to side-step a default</a> ever since a liquidity crisis plagued the Chinese property sector in 2021.While Country Garden was the top developer by sales in China last year, it slipped to the <a href="https://www.yicaiglobal.com/news/20230601-01-sales-at-chinas-top-100-property-developers-fall-14-in-may" target="_blank" rel="noopener">fifth position in the first six months of 2023.</a>The company reported annual revenues of 430 billion yuan, or $60 billion, in 2022, down about 18% year-on-year, per the report. Moody's expects the developer revenues to drop to about $328 billion this year and to about $271 billion next year, according to a report released on Monday.The developer employed about 70,000 people at the end of last year, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0420/2023042001897.pdf" target="_blank" rel="noopener">according to its 2022 annual report</a>. Over 60% of Country Garden's domestic projects are located in the Tier 3 and Tier 4 cities — typically having smaller populations — and about 26% are located in Tier 2 cities, per the report.Country Garden was established in 1992 by <a href="https://edition.cnn.com/2023/03/02/economy/china-property-country-garden-richest-intl-hnk/index.html">farmer-turned-businessman</a> Yang Guoqiang, per CNN. His daughter, Yang Huiyan, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0301/2023030100075.pdf">took over as chairman earlier this year</a>.The Foshan-based company's stocks have plunged by 20.4% since Monday. Investors are worried about the missed interest payments and the company's <a href="https://www.bloomberg.com/news/articles/2023-08-01/country-garden-faces-2-9-billion-payment-amid-liquidity-crunch?cmpid=socialflow-facebook-business&amp;utm_campaign=socialflow-organic&amp;utm_medium=social&amp;utm_source=facebook&amp;utm_content=business">decision to scrap</a> a plan to inject about $300 million into the business via a share placement.The share price drop torpedoed the wealth of chairperson Yang, who was <a href="https://fortune.com/2023/08/01/asia-former-richest-woman-property-mogul-yang-huiyan-given-country-garden-charity-payout-826-million/" target="_blank" rel="noopener">once Asia's wealthiest woman.</a> Yang's net worth is now $5.5 billion, down 84% since June 2021, <a href="https://www.bloomberg.com/billionaires/" target="_blank" rel="noopener">per Bloomberg's Billionaires Index</a>. Her wealth tanked by about $490 million on Tuesday alone.<h2>What's the debt problem at Country Garden?</h2>Country Garden <a href="https://www.reuters.com/markets/asia/chinas-country-garden-missed-two-dollar-bond-coupon-payments-2023-08-08/">confirmed to Reuters</a> it missed interest payments of about <a href="https://www.reuters.com/markets/asia/chinas-country-garden-missed-two-dollar-bond-coupon-payments-2023-08-08/" target="_blank" rel="noopener">$22.5 million</a> on two bonds that are due in February 2026 and August 2030. The company had almost <a href="https://www.ft.com/content/93601476-0c7a-452a-af33-6cc0153acac7">$200 billion in liabilities</a> at the end of 2022.<a href="https://m.thepaper.cn/rss_newsDetail_24153464?from=sohu" target="_blank" rel="noopener">State-owned media outlet Paper.cn</a> reported Tuesday that Country Garden suffered temporary liquidity pressure and was seeking funds to resolve the debt crunch, citing an unnamed company source, per CNN's translation of the report.Moody's even downgraded Country Garden's credit rating to B1 from Ba3 — meaning the debt is <a href="https://www.moodys.com/sites/products/productattachments/ap075378_1_1408_ki.pdf" target="_blank" rel="noopener">considered a risky investment</a>."The developer's struggle to address even a modest coupon payment underscores the extent of its cash crunch," wrote Sandra Chow, the co-head of Asia-Pacific Research at CreditSights, <a href="https://www.nytimes.com/2023/08/09/business/country-garden-china-real-estate.html" target="_blank" rel="noopener">per the New York Times</a>. <h2>How are the Country Garden and Evergrande problems different?</h2>The two crises are different in that the number of Country Garden's projects dwarf that of Evergrande, and that the economy is now even <a href="https://www.reuters.com/markets/asia/china-economic-data-likely-show-recovery-is-fading-quickly-2023-07-16/">worse off than it was three years ago</a>.Evergrande was once the country's second-largest developer by sales. The company <a href="https://markets.businessinsider.com/news/stocks/china-property-crisis-evergrande-81-billion-loss-housing-economic-slowdown-2023-7?_gl=1*rsznn6*_ga*MzE2MjY1NjEwLjE2ODgxMTM0MjM.*_ga_E21CV80ZCZ*MTY5MTQ4OTM4Ni4xNjMuMS4xNjkxNDg5OTYyLjM0LjAuMA..&amp;utm_medium=ingest&amp;utm_source=markets">fueled its growth largely through borrowings</a> — at one time becoming the biggest dollar-debt holder among its peers.Repaying that burgeoning debt became a herculean task. Evergrande faced a liquidity crisis in 2020, prodding it to <a href="https://www.bloomberg.com/news/articles/2023-07-27/china-evergrande-s-rise-massive-default-and-debt-restructuring" target="_blank" rel="noopener">try to halve its around $100 billion debt by mid-2023</a>.These efforts were scuppered by a slowdown in China's property sector and regulators' efforts to put brakes on property developers borrowing excessively. All these factors led to a <a href="https://markets.businessinsider.com/news/bonds/evergrande-default-debt-crisis-dollar-bonds-china-property-moelis-2021-10">default in late-2021</a>.But things are different now.The Chinese economy is <a href="https://www.businessinsider.com/china-debt-economy-implode-stock-market-wall-street-xi-jinping-2023-6">in deep trouble</a> after years of on-off COVID-19 lockdowns. The country is trying to reverse years of crackdowns and boost its flagging economy with a <a href="https://www.businessinsider.com/china-economy-stimulus-measures-but-property-tech-consumption-not-enough-2023-7" rel="">round of economic stimulus</a> aimed at boosting consumption rather than stimulating supply.Even so, broader economic uncertainty, a record-high<a href="https://www.businessinsider.com/china-gdp-economy-second-quarter-growth-retail-industrial-production-unemployment-2023-7" target="_blank" rel="noopener"> youth unemployment rate, and slower economic growth</a> could dash revival hopes. Fewer people want to buy homes in this environment, and all these factors are compounding Country Garden's troubles.<h2>Why does real estate matter so much in China?</h2>China's real estate sector <a href="https://edition.cnn.com/2023/08/09/business/country-garden-yang-huiyan-fortune/index.html">is so big</a> that it makes up about <a href="https://www.cfr.org/blog/pboc-props-chinas-housing-market" target="_blank" rel="noopener">30% of its GDP,</a> per a report <a href="https://www.caixabankresearch.com/en/sector-analysis/real-estate/chinas-real-estate-sector-size-does-matter" target="_blank" rel="noopener">Spain's Caixa Bank</a> released in January 2022.The country's property craze was largely fueled by debt — a double-edged sword, allowing the country's property developers to take huge borrowings to build apartments ahead of demand while increasing default risks, <a href="https://www.businessinsider.com/china-real-estate-property-market-speculation-debt-crackdown-xi-jinping-2023-8" target="_blank" rel="noopener">Insider's Huileng Tan reported on Monday.</a>Beijing has tried to temper this debt-fueled growth for years. In 2020, China introduced the so-called<a href="https://www.bloomberg.com/news/articles/2023-01-06/china-may-ease-three-red-lines-property-rules-in-drastic-shift" target="_blank" rel="noopener"> "three red lines" policy</a> which tried to regulate debt ratios for property developers to keep the debt burdens in check.However, putting the brakes on borrowing started sending the property <a href="https://www.businessinsider.com/china-property-sector-crisis-imf-economy-debt-2023-2" target="_blank" rel="noopener">sector into a crisis</a>. <a href="https://www.businessinsider.com/china-housing-market-explainer-cost-debt-wealth-evergrande-impact-2021-9">Evergrande defaulted on a huge mountain of debt</a>, which subsequently snowballed into a property crisis wherein other smaller developers began <a href="https://www.caixinglobal.com/2023-07-31/cover-story-chinas-property-crisis-contagion-spreads-to-state-backed-developers-102087880.html" target="_blank" rel="noopener nofollow">defaulting on their bond payments.</a>These sector-specific defaults also spurred concerns that trouble would spill into the Chinese domestic market — and <a href="https://www.businessinsider.com/china-economy-xi-jinping-evergrande-debt-american-world-fallout-2021-10">even the world economy</a>.Country Garden did not respond to Insider's request for a comment.

China's heading for another real estate crisis &mdash; but it's on a whole different scale than what it's seen before

<ul><li><keyword id="111343" type="General" weightage="20" keywordseo="Gautam-Adani" source="Orion">Gautam Adani</keyword>, India’s richest and the world’s third richest person, has been crowned ‘Asia’s busiest dealmaker’ by Bloomberg.</li><li><keyword id="76451" type="General" weightage="100" keywordseo="adani" source="Orion">Adani</keyword> stands out for being the only person on the Bloomberg billionaires list to have gained wealth this year – he added $44.6 billion to his wealth while the other nine combined lost $259.3 billion.</li><li>Key among Adani’s deals this year were the $10.5 billion ACC and Ambuja Cements acquisition from Swiss construction giant Holcim, and Israel’s Haifa port purchase.</li></ul>Gautam Adani’s rise to the top echelons of the world’s richest people has been meteoric. Adani is also the only person in the top ten in the Bloomberg’s Billionaires Index to have actually added to his wealth this year His group companies – spanning ports and energy – have been firing on all cylinders and making both Adani as well as other investors richer – Adani added $44.6 billion to his wealth in 2022 till date. In contrast, the other nine billionaires on Bloomberg’s Billionaires Index cumulatively lost $259.3 billion in the period. Overall, the seven listed Adani Group companies have added ₹8.55 lakh crore in market capitalisation this year. This stellar growth in his wealth saw him briefly rank as the second-richest person in the world, only behind Elon Musk. Currently ranked third on the Bloomberg Billionaires Index, Adani’s wealth is estimated at $121 billion, down from a peak of $150 billion, scaled in September this year. French business magnate and LVMH founder Bernard Arnault – with $165 billion and Elon Musk – with $138 billion are the only two people richer than Adani. Often pitted against India’s other richest man Mukesh Ambani, Adani has left Reliance Industries’ chief – whose wealth is estimated at $86.9 billion – far behind in the race of the richest. <cmsannotation type="cmsannotation" annotationid="‘Asia’s busiest dealmaker’" comment="subhead" text="‘Asia’s busiest dealmaker’">‘Asia’s busiest dealmaker’</cmsannotation> Success of the Ahmedabad-born Adani’s business empire has helped him top the list of the sixth edition of the ‘Bloomberg 50’ –a list <a href="https://www.bloomberg.com/features/2022-bloomberg-50/">of the most</a> influential people in global business this year. His aggressive acquisitions during the year have also earned him the tag of ‘Asia’s busiest dealmaker,’ with the crown jewel being the acquisition of cement giants ACC and Ambuja Cements from Swiss construction major Holcim for $10.5 billion. So far in 2022, Gautam Adani has struck deals across the ports, construction, media and energy businesses. Adani started the year with the listing of Adani Wilmar, an FMCG company, on the bourses in February. This was just in time to leverage the benefits of the Russia-Ukraine war, which sent edible oil prices boiling and<a href="https://www.businessinsider.in/business/corporates/news/adani-wilmar-revenue-rockets-fuelled-by-boiling-edible-oil-prices/articleshow/91260794.cms"> boosted</a> the company’s revenue and stock price. Later in July, Adani Ports and Special Economic Zone announced it had won a tender to privatise Israel’s Haifa port in a deal valued at $1.18 billion. “In the long run, this is a tremendous port as we anticipate Israel becoming a connection both for Europe and the Middle East, and therefore we stand to benefit from the new possible trade lanes that will be created,” said Karan Adani, CEO, Adani Ports and Special Economic Zone, announcing the purchase. The biggest deal of the year for the Adani Group, was the $10.5 billion acquisition of ACC and Ambuja Cements from Holcim in September. Together, these two companies propelled the Adani Group to become the<a href="https://www.businessinsider.in/business/corporates/news/heres-why-adani-and-jsw-group-are-racing-to-acquire-ambuja-cements-and-acc-from-holcim/articleshow/91465197.cms"> second-largest cement maker</a> in the country in terms of market capitalization, only behind UltraTech Cement. <cmsannotation type="cmsannotation" annotationid="$70-billion green energy ambitions and the ‘over-leveraged’ concerns" comment="subhead" text="$70-billion green energy ambitions and the ‘over-leveraged’ concerns">$70-billion green energy ambitions and the ‘over-leveraged’ concerns</cmsannotation> In September this year, Adani also announced an ambitious $70 billion new energy plan that would see the conglomerate setting up three giga factories – one each to manufacture solar modules, wind turbines and hydrogen electrolysers – by 2030. However, the billionaire faced a bazooka from CreditSights, a Fitch Ratings company, which came out with a<a href="https://www.businessinsider.in/business/corporates/news/gautam-adanis-overly-ambitious-growth-plans-can-spiral-into-a-massive-debt-trap-fitch/articleshow/93725014.cms"> report</a> stating that the Adani Group’s ambitious growth plans could spiral into a debt trap. This spooked investors, resulting in the Adani Group companies<a href="https://www.businessinsider.in/stock-market/news/adani-group-sheds-94000-crore-in-value-after-a-report-says-its-deeply-over-leveraged/articleshow/93728528.cms"> shedding ₹94,000 crore</a> market capitalisation in a single day. A couple of weeks later, though, the research firm<a href="https://www.businessinsider.in/business/corporates/news/creditsights-tones-down-its-comments-on-adani-groups-debt-position-after-a-meeting-with-the-company/articleshow/94071491.cms"> toned down</a> its comments, revising estimates about the cash flow position of two group companies. More recently, the group’s flagship Adani Enterprises <a href="https://www.businessinsider.in/business/news/adani-to-raise-rs-20000-cr-through-fresh-share-issue/articleshow/95764529.cms">received</a> board approval to raise ₹20,000 crore via a follow-on public offer (FPO), pending shareholder approval, according to its stock exchange filing. These funds will be used for the Adani group’s green energy and digital business ambitions. All in all, it has been a busy year for Gautam Adani – from starting the year with a wealth of $77 billion to becoming the third-richest person in the world. It remains to be seen if 2023 will be the year Adani becomes the world’s richest person. SEE ALSO: <a href="https://www.businessinsider.in/india/news/ice-cubes-to-gulab-jamuns-and-50-lakh-kilos-of-organic-fruits-and-veggies-how-india-swiggyd-in-2022/articleshow/96275305.cms">Ice cubes to gulab jamuns and 50 lakh kilos of organic fruits and veggies – how India Swiggy’d in 2022</a> <a href="https://www.businessinsider.in/policy/economy/news/indian-economy-to-outpace-world-average-growth-in-2023-can-it-duck-global-headwinds/articleshow/96256621.cms">Indian economy to outpace world average growth in 2023 – Can it duck global headwinds?</a> <a href="https://www.businessinsider.in/business/corporates/news/tpg-to-acquire-adar-poonawalla-led-groups-housing-finance-arm-at-3900-crore-valuation/articleshow/96256578.cms">TPG to acquire Adar Poonawalla-led group’s housing finance arm at ₹3,900 crore valuation</a>

Gautam Adani: Man of the year

<ul><li><keyword id="111343" type="General" weightage="20" keywordseo="Gautam-Adani" source="Orion">Gautam Adani</keyword>’s total wealth now stands at $149 billion, while Amazon founder <keyword id="191583" type="General" weightage="50" keywordseo="jeff-bezos" source="Orion">Jeff Bezos</keyword>’ wealth stands at $150 billion.</li><li>In 2022 so far, <keyword id="76451" type="General" weightage="100" keywordseo="adani" source="Orion">Adani</keyword> has nearly doubled his wealth, from $77 billion at the beginning of this year to $149 billion now.</li><li>Since the COVID-19 pandemic outbreak, Adani’s wealth has increased by a whopping 2,400%.</li></ul>Gautam Adani is now just $1 billion shy of becoming the second richest person in the world, behind Amazon founder Jeff Bezos. Just last month, Adani became the third richest person in the world, beating Bernard Arnault of LVMH. According to Bloomberg Billionaires Index, Gautam Adani’s wealth stood at $149 billion, within striking distance of Jeff Bezos, whose wealth stands at $150 billion. In 2022 so far, Adani has nearly doubled his wealth, from $77 billion at the beginning of this year to $149 billion now. <a href="https://www.businessinsider.in/business/corporates/news/gautam-adani-is-now-the-third-richest-person-in-the-world-as-per-bloomberg/articleshow/93868294.cms">Since becoming the third richest person at the end of August</a>, Adani has added $12 billion to his net worth, while Bezos has lost $3 billion. Adani is now $115 billion away from <keyword id="6355315" type="General" weightage="50" keywordseo="elon-musk" source="Orion">Elon Musk</keyword>, the richest person in the world. Adani’s rise to the top echelons of the richest people in the world has been nothing short of meteoric. The Gujarat-based businessman struck gold at the onset of the Covid-19 pandemic, when his total net worth stood at a little over $6 billion. Since then, Adani’s net worth has surged 2,400%, catapulting him to the top three of the world’s richest people. Essentially, if you had invested ₹1 lakh across Adani stocks on March 24, 2020, today your investment would be worth ₹24 lakh. <div type="Article" hostid="261" msid="94220904" title="For every ₹100 pulled out by foreign investors from the Indian equity markets, domestic investors have ploughed back ₹89 this year" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Adani Group beats Tatas to become the most valuable group in India" comment="subhead" text="Adani Group beats Tatas to become the most valuable group in India">Adani Group beats Tatas to become the most valuable group in India</cmsannotation> Adding another feather in Gautam Adani’s cap is the fact that the Adani Group is now the most valuable amongst India Inc. – Adani has beaten the mighty Tatas when it comes to the total market cap. According to data from stock exchanges, the Tata Group’s total market cap stood at a little under ₹21 lakh crore. Now, the Adani Group has edged past with a combined market cap of over ₹21 lakh crore. Here’s where the seven Adani Group companies listed on the stock exchanges stand: <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Share price </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market cap (in crore) </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YTD performance </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Transmission </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,105 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,57,954 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">137% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Enterprises </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,749 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,27,352 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">118% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Total Gas </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,601 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,96,080 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">106% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Green </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,344 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,71,281 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">73% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Ports </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹969 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,04,593 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Power </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹399 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,53,969 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">285% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Wilmar </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹730 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹94,928 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">170% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹21,06,157 </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: NSE, as on September 15, 2022 <cmsannotation type="cmsannotation" annotationid="Leaving Ambani behind" comment="subhead" text="Leaving Ambani behind">Leaving Ambani behind</cmsannotation> Mukesh Ambani, who held the tag of the richest Indian for several years, is now a distant 8th in the Bloomberg Billionaires Index, with a total wealth of $91 billion. Earlier this year, both Ambani and Adani were in a neck-and-neck race and constantly beating each other in terms of their wealth, before Adani hit the nitro and blazed past the likes of Bill Gates, Warren Buffett, Larry Page, and others. Interestingly enough, while Bezos’ Amazon had a turnover of $470 billion in 2021, Adani Enterprises – the flagship of the Adani empire – posted a turnover of a meagre $5.3 billion in the same year. <cmsannotation type="cmsannotation" annotationid="What over-leverage?" comment="subhead" text="What over-leverage?">What over-leverage?</cmsannotation> Last month, <a href="https://www.businessinsider.in/stock-market/news/adani-group-sheds-94000-crore-in-value-after-a-report-says-its-deeply-over-leveraged/articleshow/93728528.cms">Fitch Group’s CreditSights raised concerns</a> about the Adani Group being “deeply over-leveraged”, tanking the Adani Group’s seven listed stocks. This wiped out over ₹94,000 crore in investor wealth. However, two weeks later,<a href="https://www.businessinsider.in/business/corporates/news/creditsights-tones-down-its-comments-on-adani-groups-debt-position-after-a-meeting-with-the-company/articleshow/94071491.cms"> the ratings agency came back and toned down its comments</a> and made a couple of corrections in its previous calculations. Interestingly, its follow-up report also did not contain any references of “deeply over-leveraged”. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/for-every-100-pulled-out-by-foreign-investors-from-the-indian-equity-markets-domestic-investors-have-ploughed-back-89-this-year/articleshow/94220904.cms">For every ₹100 pulled out by foreign investors from the Indian equity markets, domestic investors have ploughed back ₹89 this year</a> <a href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-a-story-on-how-to-generate-wealth-via-hope-fomo-and-of-course-debt/articleshow/91829090.cms">Understanding Gautam Adani’s rise: a story on how to generate wealth via hope, equity and of course debt</a> <a href="https://www.businessinsider.in/stock-market/news/for-every-100-pulled-out-by-foreign-investors-from-the-indian-equity-markets-domestic-investors-have-ploughed-back-89-this-year/articleshow/94220904.cms">For every ₹100 pulled out by foreign investors from the Indian equity markets, domestic investors have ploughed back ₹89 this year</a>

Gautam Adani is $1 billion away from beating Jeff Bezos as the second richest person in the world

<ul><li><keyword id="6484187" type="General" weightage="80" keywordseo="ril" source="Orion">RIL</keyword> is now entering its fourth capex cycle, says <keyword id="48670" type="General" weightage="50" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>. </li><li>It has pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into the new energy ecosystem. </li><li>RIL’s investment cycles provided 2-3x value creation for shareholders in the last two decades, says Morgan Stanley. </li><li>“We see up to $60 billion value creation in the new energy business by 2025,” the report says. </li><li>However, if refining margins are hit, <keyword id="10926" type="General" weightage="50" keywordseo="reliance" source="Orion">Reliance</keyword>’s annual debt will go up by $3 billion per annum and impact cash flows. </li></ul>Reliance has always gone big – and every capex cycle it undertakes is bigger and ‘newer’ than the last. The oil to telecom to retail major is now entering into the fourth capex cycle, according to Morgan Stanley, after the company pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into a new energy ecosystem. In his own words, RIL’s chairman <keyword id="3820" type="General" weightage="50" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> called it the most ambitious ever, at the 45th annual general meeting. In its latest report, Morgan Stanley says that every time RIL re-imagined its business, it has executed above investor expectations. “Investment cycles have unwound with around two to three times value creation for shareholders in the last two decades with every decade seeing around $60 billion in market cap creation,” the report says. This fourth cycle will also produce higher value quickly as its new energy pivot is integrated with its chemicals business and its own large captive use. “RIL’s integrated approach on solar panels and mobility/storage batteries, and focus on providing an alternative to China does stand out and we see up to $60 billion value creation in the new energy business by 2025. We raise our base case new energy valuation to $32 billion to account for quicker monetization,” the report says. RIL, which is a net energy consumer at Jamnagar, will make the green choice by putting more solar and green hydrogen projects that can help reduce its own energy costs. Moreso, it will also focus on producing high value added chemicals from its petcoke gasifiers. It will also enter the engineering, procurement and construction business for selling panels and sell panels with solutions on the back of multiple investments in technology to global customers. “We estimate the business to contribute to around $1 billion in EBITDA by 2027,” the report said. How did the past RIL capex cycles work? Starting in 1997 with Jamnagar refinery commissioning, RIL has gone through three important capex cycles so far. These pertain to gas fields at KGD6, the Jamnagar expansion in 2012 and the great re-entry into telecom. While they did create value, it did not come at no cost to the organization in the form of write-offs, impairments and ‘challenged capex’. “In every capex cycle, RIL also had its share of challenges, such as the write off of investments for petcoke gasifiers, telecom spectrum and upstream shale investments,” the report said. RIL had invested in three shale gas assets in 2010 and 2013 but exited them in 2017. In addition to investing in KGD6 block in the Krishna Godavari which is producing over 25 mmscmd of gas, RIL had also invested in Cauvery and Mahanadi basins over the years. RIL also had to rejig its investments in retail between 2006-2010 and emerged stronger in 2015-16, the report said. RIL capex that was challenged <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Challenged capex </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY03-FY10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$12.5 billion upstream exploration and production -Includes $2.7 billion impairment taken on shale investments </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY12-FY16 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8 billion capex into petcoke gasifier </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY18 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$2 billion spectrum writeoff </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4 billion impact on petcoke gasifier value during hiveoff </td></tr></tbody></table>Source: Morgan Stanley Telecom and retail businesses are ‘settling’ Morgan Stanley believes that the timing for new energy investments is ripe. Its other businesses are unwinding and expected to unwind faster in the future. After kick starting the business with ‘free data’ and still retaining the tag of providing the cheapest data offerings, <keyword id="2003276" type="General" weightage="50" keywordseo="jio" source="Orion">Jio</keyword> is on the verge of reaping benefits. Telecom business has become a three-player market and the report expects the average revenue per user to grow by over 50% over the next four to five 5 years. That means Jio’s revenues can expand to 1.6 times its FY22 levels. It also expects its 5G investments to yield quicker monetization than 4G did. The biggest advantage that new energy investments bring is the global and national support as India pledges to move towards Net Zero emissions by 2070. However, green hydrogen, solar panels and battery technology is a fast evolving sector with new changes afoot. “Policy support in this cycle is also increasing for the new energy vertical and the government recently approved a bill in parliament to raise the use of alternative fuels, provide incentives for investments in new energy and start carbon trading also points to rising total addressable market for RIL – something we saw less of in previous cycles,” the report said. But there is a catch. For its new energy business to run smoothly, RIL needs its refining business to hold steady. Refining margins fund nearly a third of RIL's investment plans and if margins were to decline to cycle low as the business is cyclical — it will reduce operating cash flows by 20% and annual debt would rise by $3 billion, as per Morgan Stanley’s calculations. “While cycle low gross refining margins are not sustainable as there would be a supply response, we do see a net impact of 15% hit to our net asset value as RIL would see its multiple de-rate as well,” the report said. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/jamnagar-is-going-green-but-on-the-back-of-its-oil-and-chemicals-business/articleshow/93859168.cms">Jamnagar is going green but on the back of its oil and chemicals business</a> <a href="https://www.businessinsider.in/business/corporates/news/gautam-adanis-overly-ambitious-growth-plans-can-spiral-into-a-massive-debt-trap-fitch/articleshow/93725014.cms">Gautam Adani’s overly ambitious growth plans can spiral into a massive debt trap: CreditSights report</a> <a href="https://www.businessinsider.in/finance/news/worst-of-times-can-also-be-the-best-of-times-says-anand-mahindra/articleshow/93376032.cms">Worst of times can also be the best of times, says Anand Mahindra</a>

RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

<ul class="summary-list"><li><keyword id="330063" type="COMPANY" weightage="60" keywordseo="Silver-Lake">Silver Lake</keyword> Group made "the trade of a lifetime" on <keyword id="6358378" type="ORGANIZATION" weightage="60" keywordseo="amc">AMC</keyword> Entertainment, according to one hedge fund manager.</li><li>Another firm, <keyword id="10669846" type="UNKNOWN" weightage="60" keywordseo="mudrick-capital">Mudrick Capital</keyword>, made a similarly successful wager earlier this month.</li><li>The two firms were able to convert distressed debt into equity in AMC after Wednesday's share-price jump.</li><li>"The market did not believe AMC would be able to get through the downturn — we did," said Jason Mudrick, founder and CIO of Mudrick Capital.</li></ul>Investment firm Silver Lake Group has made the "trade of a lifetime" on AMC Entertainment, one credit hedge fund manager told the <a href="https://www.ft.com/content/54818d6c-dde2-4ef4-be57-260e5f42f992">Financial Times</a>.The trade involved Silver Lake swapping risky debt in the downtrodden theater chain for stock. Now, with AMC shares up as much as 370% this week, the wager has paid off handsomely.The surge this week triggered $600 million worth of Silver Lake's <keyword id="1765912" type="PERSON" weightage="60" keywordseo="Convertible-Debt">convertible debt</keyword> notes, allowing the company to exchange its risky debt for the surging equity. The debt was ultimately swapped into stock at a price of $13.51, according to a <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1411579/000110465921008352/tm213880d2_8k.htm" target="_blank" rel="noopener">regulatory filing</a>. As of Wednesday's close, Silver Lake's stake was worth more than $880 million, according to the FT.Mudrick Capital is another firm that made a similar trade earlier this month. It exchanged $100 million in debt for nearly 13 million shares, which are currently worth $273 million, according to the FT report."The market did not believe AMC would be able to get through the downturn - we did," Jason Mudrick, founder and CIO of Mudrick, told Bloomberg."AMC has done a great job in capitalizing on investors' appetite for its shares," added Matt Zloto, co-head of U.S. high-yield research at CreditSights.The company now says it has enough cash to survive until July at current attendance levels. It also on Wednesday finished issuing another $304 million of equity at a price of $4.80.Read more: <a href="https://www.businessinsider.com/reddit-stocks-webull-ceo-sec-intervene-gamestop-amc-robinhood-wallstreetbets-2021-1" target="_blank" rel="noopener">'Anarchy never works': Webull CEO Anthony Denier told us why the SEC should intervene as an army of Reddit traders takes over the market - and said membership exploded as people jumped ship from Robinhood</a>

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