Virendra Pandit
New Delhi: After witnessing a washout of over USD 100 billion worth of market capitalization since the January 24 Hindenburg Report’s allegations, the stocks of Adani Group companies are bouncing back on the bourses with investors, after their initial panic, returning to the intact ‘India Story.’
While the Adanis are currently busy pre-paying debts and holding roadshows across global financial markets to restore investors’ confidence, the latest investment of USD 1.9 billion (Rs. 15,446 crores) into four group companies has further boosted the sentiment.
This week, the last four trading sessions saw the port-to-power conglomerate adding a market capitalization of nearly Ra. 1.72-lakh crore, of which Rs. 68,430-crore addition was witnessed in a single session on Friday (March 3).
Rajiv Jain, Chairman, and Chief Investment Officer of the US-based global equity investment firm GQG Partners, which made the fresh infusion on Thursday, said his company had been looking at Adani stocks for the last five years, but the ‘valuation was in no man’s territory,’ the media reported.
In an interview with The Australian Financial Review, he cited the reasons for his continued confidence in the Adani Group.
“About 25 percent of India’s air traffic passes through their airports and 25 percent to 40 percent of India’s cargo volume goes through their (Adanis’) ports. The biggest competitor is actually the Indian government, which is not exactly the fastest-running horse in the race.”
At a time when bankers and investors adopted a cautious approach to the Adani Group companies, Jain believes the Indian conglomerate is not only a safe bet but also “fantastic” and “irreplaceable”.
He disagreed with the Hindenburg Report. The US-based short seller firm had, by claiming fraud and misgovernance at Adani firms, launched the market rout. “They have their view and we have our view, and we happen to disagree with their view, but that’s what makes a market,” Jain said.
Several financial markets worldwide, including in India, sailed in green territory on Friday, the last trading day, owing to a combination of positive factors. These included the GQG investment in the Adani companies, expressing confidence in the conglomerate whose shares bounced back significantly on Friday.
GQG Partners made investments worth Rs. 15,446 crores in four Adani Group companies—the flagship Adani Enterprises, Adani Ports and SEZ, Adani Green Energy, and Adani Transmission.