Black Cobra played an innings like Harshad Mehta with Dhirubhai. But Ambani did not budge. In this fight, he gave such a fight that these cobras agreed to eat coconut.
Image Credit Source: Social Media
Mumbai : At this time in the stock market, all eyes are on the shares of Adani Group because billionaire Adani’s empire has taken off. American short-selling firm Hindenburg Research (Hindenburg Research) Adani after the report surfaced (Adani) The group’s shares have fallen heavily. The Hindenburg-Adani case reminds us of the struggle of such a big billionaire. The fight was so big that Mumbai’s stock market had to be closed for three days. Let’s know what happened in this war.
Just like the FPO of Adani Enterprises after its FPO fell below the price band in the open market. A similar situation happened 31 years ago. He has held minor positions in companies owned by billionaire Gautam Adani while Hindenburg Research has made several allegations. He has taken this short position through US trending bonds and non-Indian derivatives. There were two big warriors in the battle of short selling, one was the founder of Reliance Industries, Dhirubhai Ambani and the other was the cobra of the Indian stock market!
Dhirubhai Ambani’s Reliance Industries was listed on the stock market in 1977. Within a year his share, which had a face value of Rs 10, increased to Rs 50. By 1982, RIL had reached Rs 186, with Black Cobra leading RIL’s jump. His name was Manu Manek and he had a huge stake in the stock market. It was said that how much a stock should rise and how much it should fall, it was in his hands.
different story from big bull
Due to this latest controversy, the history of Manu Manek should be revised. Scam 1992 (Scam 1992) was the story of Harshad Mehta aka Big Bull in the popular web series on OTT platform a few days back. Manu Manek had started diluting his shares to sideline Harshad Mehta.
Brokers who make profits from short selling sell the borrowed shares, when these middlemen start selling these shares at market price, the shares get shorted. Their motive behind such moves is to bring down the share price. Therefore, when the share price declines, they are bought and fixed at a lower price. Mass short selling increases the pressure to such an extent that panicked other investors also start selling the shares. A similar fight once took place in the stock market as well., Hamish Macdonald has given details of this fight in his book ‘Ambani and Sons’.
Manu Manek had a good hold on the stock market in the 1980s and 1990s. There was no era of derivatives then. Therefore, the game of short selling is played by borrowing shares from well-known brokers. Manu was the master of this game. He had formed his own pressure group by gathering people like him. People like Rakesh Jhunjhunwala were also associated with Manu Manek during Harshad Mehta’s time.
Innings like Harshad Mehta
Manu played Harshad Mehta-like innings with Dhirubhai. In 1982, the rights issue of Reliance Industries came. It was a partially convertible debenture issue. In a way, through this, RIL was raising debt from investors. On the partially convertible debentures, the Reliance company was also offering fixed interest to the investors and an option to convert part of these debentures into shares after a specified date.
Enemy groups active as soon as Reliance is released
To eliminate Dhirubhai, who was new to the market, Black Cobra started short-selling Reliance shares as soon as the rights issue came around. Manu Manek’s group sold 3.5 lakh shares of Reliance Industries.
RIL suddenly fell from Rs 131 to Rs 121. Stock market settlement was done every other Friday. This means that the shares sold by the shorts will be delivered to their buyers after 14 days. Manu Manek’s group had the opportunity to buy back the shares at a lower price. He increased sales. This was a big blow for Dhirubhai Ambani.
Ambani asked his men to maintain the march
Ambani did not hesitate to ask close people like Anand Jain to lead the march. They warned them not to sell RIL shares at any cost and forced them to buy shares of the company in bulk. Cobra Group sold 1.1 million shares. On the other hand, some special people were deployed to buy them on a large scale. NRI investors from Gulf countries bought these shares. He bought more than 8 lakh shares. It is being told that these investors have bought shares of RIL worth about Rs 10 crore.
Ambani reversed the move of Black Cobra
As a result, the price of RIL started rising again and Ambani turned the Black Cobra move against him. As the settlement period approached, pressure mounted on the Manu Manek camp to deliver shares to buyers. Buying shares from the market was no longer profitable, so he opted for a rollover.
He got caught in this game of short sailing
But there was a problem with the rollover. If Manu Manek’s people had asked the investors to whom they had sold the shares to rollover. So they have to pay premium. Manu Manek’s camp got trapped in this game of short sailing. The purported NRI investors who bought the shares sought delivery on April 30.
Cobra’s light has been turned on
When Manu Manek came to know that most of the buyers were Dhirubhai’s own people, he was shocked. Finally it was time for settlement. Dhirubhai’s camp is said to have demanded a premium of Rs 25 per share. There was a commotion in the cobra’s camp. There was so much ruckus in the stock exchange that the stock market had to be closed for three days. Manek had to compromise by buying shares from the market. With this, RIL’s stock reached a peak of Rs 201. SK Baruah and JR Verma wrote in their book ‘The Great Indian Scam’, ‘They were duped. Manek Group had to buy Reliance shares at a higher price.
For more Business updates, Click here.