'Where is the evidence...': Mark Mobius questions US allegations against Adani, drops a hint for investors

Veteran investor Mark Mobius has expressed skepticism over the recent US Department of Justice (DoJ) indictment targeting Adani Group officials. Mobius, in an interview to ET Now, said the DoJ may have "overstepped its bounds" by involving itself in an Indian company’s affairs, stating, “The Justice Department really has no business prosecuting an Indian company.” 

He added that evidence of wrongdoing remains unclear, labeling much of it as "hearsay."

Mobius indicated he did not purchase Adani stocks during their recent dip, citing the rapid recovery in prices. He sees potential value within the group, particularly in its infrastructure and power businesses, areas he believes showcase Adani's global expertise.

The Adani Group has been navigating a challenging landscape since the indictment news broke, but Nomura remains optimistic. The brokerage noted that Adani's financial resilience has improved significantly since last year’s Hindenburg allegations. Nomura highlighted enhanced liquidity management and dismissed concerns over promoter share pledges, citing strong risk management.

On the broader market, Mobius acknowledged India’s thriving small- and mid-cap stocks, attributing their valuation surge to anticipation of index inclusion. These stocks, often overlooked by brokers, gain traction once they capture market researchers’ attention, driving prices higher.

Nomura further downplayed the implications of the DoJ allegations, stating they do not constitute a breach of anti-corruption covenants unless proven. While some global banks have paused financial support, Nomura expects relationships to normalize once the matter is resolved. Japanese banks, in particular, remain committed to the Adani Group.

To bolster investor confidence, Adani recently announced capital expenditure cuts and a bond buyback plan. Nomura predicts the group’s bonds will gradually stabilize, trading at 7–8% levels.

Mobius emphasized the resilience of India’s power sector, including coal-based energy, which continues to thrive amid rising global demand. Despite recent turbulence, he maintains a bullish outlook on sectors like telecom and infrastructure, citing their growth potential.