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

One of the biggest investors in India’s Adani Enterprises says he may be done doubling down on his investment.

Rajiv Jain, the chairman and chief investment officer of GQG Partners, told CNBC Thursday that his profits on Adani stands at about $4 billion, and he is likely done investing further.

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

“We doubled down on Adani in May and June and … maybe tripled down in August. I don’t know whether 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 business spanning from ports, airports, renewables, cement among other things.

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

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

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

The U.S. boutique investment firm was the fifth largest stakeholder of Adani Enterprises as of November, according to LSEG data.

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

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

It has risen about 2.3% in January so far, after a recent court ruling in early January.

The Supreme Court of India said at that time that no further inquiries were needed beyond the 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 increase our position when we feel the markets have clearly spoken,” Jain told CNBC on Thursday.

“Vast majority of the allegations are kind of yesterday’s news. There was no real substance. So I’m still kind of surprised how, how animated everybody was when the substance was not there. So yeah, do we feel vindicated? The answer is yes.”

GQG Partners is also positive on India’s tech sector, and highlighted semiconductors and software companies.

“We entered 2022 extremely underweight on tech and the same happened in early 2023. But then we pivoted by the first and second quarter because we thought tech had begun to improve much faster than we would have anticipated little,” Jain said.

He said he remains bullish on India’s health-care and cement industries going into 2024.