A major emerging-markets investor has bought up nearly $2 billion in the embattled Indian company the Adani Group, according to an article in Bloomberg. Rajiv Jain, chief investment officer of GQG Partners Inc., believes the investment will return more than 100% over the next five years.
Earlier this year, the Adani Group was accused by U.S. short-seller Hindenburg Research of manipulating their stock-price and fraud, resulting in as much as a $153 billion in market value. But the accusations did not turn off Jain, who believes the company’s assets are still valuable. Many of those assets, such as its coal mining businesses, data centers, and majority stake in Mumbai’s airport, are intrinsic in the Indian government’s goals to improve infrastructure and increase domestic manufacturing. Indeed, Jain told Bloomberg that “the airport itself could be worth more than the company” as the land on its own spans some of the most expensive urban real estate in all of Asia. Jain also contends that the allegations against Adani look less problematic when viewed through an Indian lens. While some things may not have been disclosed properly, such as Adani owning more than 75% of the company through offshore accounts, Jain questions whether it’s actual fraud.
Jain has been in the investing business for over 30 years and maintains a diverse portfolio at GQG, overseeing over $90 billion in investments ranging from oil to banking. He also looks favorably at investments in state-owned enterprises in China as well as Latin American companies such as Petrol Brasilerio SA, a large oil driller that a leadership change in Brazil has brought under increased scrutiny. And as he told Bloomberg in the interview, in his long career he has “yet to come across a perfect company.”
