'Bought bulk of additional stake in Adani firms before SC panel report': GQG's Rajiv Jain

GQG Partners CIO Rajiv Jain said the US-based investment firm bought bulk of their additional stake in Adani Group companies before the Supreme Court panel report.

GQG Partners has raised its stake in Gautam Adani's conglomerate by about 10% and will take part in the group's future fundraising, the US investment firm said on Tuesday.

"Within five years, we would like to be one of the largest investors in Adani Group depending on the valuation, after the family," Jain told Bloomberg.

In an interview with BQ Prime, Jain said GQG bought 'bulk' of additional stake in Adani firms before SC panel report.

Jain, who said that Adani has the "best infrastructure assets available in India", did not specify which companies GQG had bought into in it latest investment. 

In March, GQG Partners invested $1.87 billion in four Adani firms, including flagship unit Adani Enterprises Ltd and made over 60% gains within three months.

Jain spoke about his investment rationale in Adani firms.

"Adani is kind of unique because they are in a very strong investment phase even now. And what we've seen, for example, in ports is that it is a very good sort of a case study that after certain years you will see a hockey stick of earnings come through. The infrastructure assets have a very long tail. The returns are regulated by the government most of the time. After the initial setup, you can get very steady returns. So, to grow you need to keep investing more capital, so they are always free cash flow negative. So, they're always free cash flow negative, but you get very high returns, on a long-term basis," said Jain.

He said he was "not exactly surprised" with the Supreme Court panel's report on the Adani-Hindenburg row.

"...They got complete clean chit," Jain said adding, "a lot of things that are being investigated have been investigated before," he said. "It has kind of become a political football more than real economics, substantive issue."

A Supreme Court-appointed panel found no evidence of stock price manipulation in the Group companies, which helped Jain earn over 50% gains within three months on his March investments. 

The rout in Adani stocks after Hindenburg report in late January alleged fraud, stock manipulation, and money laundering at the apples-to-port group, erased about $145 billion in its market value at its lowest point.

Adani Group denied all allegations and likened the US investment firm's report to an attack on India.

However, Adani stocks have been on the recovery path since the group helmed by billionaire Gautam Adani put in place a comeback strategy that includes repaying some debt, buying back some bonds, infusion of fresh investment GQG, and a planned Rs 21,000 crore fundraising by two group companies.