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GQG scored a big win with its Adani bet, but could now pause

by SuperiorInvest

Art school professor Sagar Kambli puts the finishing touches on a painting by Indian businessman Gautam Adani (L) highlighting the current crisis of the Adani group in Mumbai on February 3, 2023.

Indranil Mukherjee | afp | fake images

One of the largest investors in India Adani Companies says you may have just finished doubling your investment.

Rajiv Jain, president and chief investment officer of GQG Partners, told CNBC on Thursday that his earnings in Adani amount to about $4 billion and that he is probably done investing more.

“We’re pretty full. So I don’t know [if] We will double down further,” Jain said on “Street Signs Asia.”

“We doubled the investment in Adani in May and June and… maybe tripled it in August. I don’t know if we’ll go further from here.”

Adani Enterprises, owned by one of India’s richest men, Gautam Adani, is one of the country’s top three conglomerates. It has businesses ranging from ports, airports, renewable energy, cement, among others.

In late January 2023, a short-seller report from Hindenburg Research of New York accused the company of manipulating stock prices and alleged that it had very high debt levels. The company has rejected these accusations.

The group has 10 entities listed on the Indian stock market.

In the first quarter of 2023, Adani shares fell more than 54% and wiped out more than $100 billion in value as a result of the report. That was also when GQG Partners began investing in the conglomerate.

The US boutique investment firm was the fifth-largest shareholder in Adani Enterprises in November, according to LSEG data.

LSEG data also showed that GQG made substantial investments in Adani during the second and third quarters of last year, but slowed its pace in the fourth.

By the end of 2023, Adani Enterprise shares had recovered from the massive fallout and ended the year with minor declines of 26%.

So far, it has risen around 2.3% in January, following a recent court ruling in early January.

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India’s Supreme Court said at the time that no further investigations were necessary beyond ongoing scrutiny by market regulator Securities and Exchange Board of India (SEBI), which is currently investigating the conglomerate following allegations made by Hindenburg. Research.

“We increased our position when we feel the markets have spoken clearly,” Jain told CNBC on Thursday.

“The vast majority of the accusations are yesterday’s news. There was no real substance. So I’m still a little surprised at how animated everyone was when the substance wasn’t there. So yeah, do we feel vindicated? The answer is Yeah.”

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GQG Partners is also positive on India’s technology sector and highlighted semiconductor and software companies.

“We entered 2022 extremely underweight in technology and the same thing happened in early 2023. But then we changed course in the first and second quarter because we thought that technology had started to improve much faster than we would have little anticipated.Jain said.

He said he remains optimistic about India’s healthcare and cement industries heading into 2024.

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