Star investor Rajiv Jain said his US-based fund will likely increase its stakes in besieged Indian billionaire Gautam Adani’s firms over time, reiterating his confidence in the ports-to-power conglomerate after investing $1.9 billion last week.
(Bloomberg) — Star investor Rajiv Jain said his US-based fund will likely increase its stakes in besieged Indian billionaire Gautam Adani’s firms over time, reiterating his confidence in the ports-to-power conglomerate after investing $1.9 billion last week.
“This is one of the best energy transition stories you can buy, one of the best infrastructure assets you can get in India,” GQG Partners Chairman Jain said on a call with reporters in Australia Wednesday. The Adani Group, which made its early fortune in coal trading but has been pivoting toward green energy, faced a massive stock rout in teh past few weeks after a scathing report from an American short seller.
GQG Partners bought shares in four firms from an Adani family trust on Thursday, marking the most significant show of support for Adani from a major money manager since Hindenburg Research’s Jan. 24 report alleged accounting fraud and share-price manipulation that spurred a steep sell off.
Despite the Adani Group denying these allegations, the rout continued and at its worst, had lopped off more than $150 billion off its market value. Adani companies’ stocks have recovered some ground since.
The fund manager’s comments may help bolster investor sentiment after the Adani Group spent the past few weeks attempting to assuage investor concerns about the corporate governance and indebtedness at the conglomerate. Jain has been meeting with investors, including pension funds, in Melbourne this week and will spend the next two days in Sydney.
“We feel these are unique assets,” Jain said. He added that over time “this is truly a long term investment and chances are we will probably buy more because we are not at full size at this point.”
Adani, the tycoon who used to be Asia’s richest person, and his aides have so far junked a $2.5 billion share sale by the flagship Adani Enterprises Ltd., scrapped new acquisitions, prepaid some debt, plan to repay more, reined in capital spending as well as hired top-shelf US crisis communication and legal teams.
Investor Roadshows
The group also held recent investor roadshows in Singapore and Hong Kong as part of its confidence-building measures and is holding more of these gatherings in London and US in coming days.
“We feel that we got an incredible opportunity to initiate positions and over time the size will increase,” Jain said.
Investors Jain has spoken with this week had reacted more positively than he expected and they understood that Adani was “part of the solution” when it came to meeting net zero targets, he said.
“The meetings were very constructive,” said Laird Abernethy, GQG’s managing director for Australia and New Zealand. “It’s not a position that the herd is following.”
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