Whole thing about Adani was overblown by Hindenburg, says Mobius Capital’s Mark Mobius

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Mumbai: Mark Mobius, seasoned investor and founder of Mobius Capital, believes that the concerns around the Indian ports-to-energy conglomerate Adani Group were overblown by Hindenburg Research, the activist short seller who released a report about the group right before Adani Enterprises FPO (Follow-on Public Offering) in late January.

In an exchange with the media, the fund manager said, “My feeling is that probably the whole thing about Adani was overblown by the Hindenburg Group. They have their reasons for if you’re shorting stock, you want all the bad hints to come out. But I don’t think the reports by Hindenburg were completely accurate and on target.”

Mobius noted that the Adani family’s involvement and the high debt of the company was known way before Hindenburg’s report came out.

“Everyone knew that the family was involved in the company. There’s no secret about that. And a number of other things they supposedly revealed were pretty well known by analysts. But the fact remains the debt levels were too high, this was also known,” the fund manager added.

The Hindenburg report, that came out on January 24, three days before Adani Enterprises FPO, alleged that the Adani Group had engaged in brazen stock manipulation, accounting fraud, improper use of offshore tax havens involving the promoter’s family.

The report also flagged concerns about the group’s high debt. Mobius mentioned that the group has “incredible assets” and also noted GQG’s Rajeev Jain’s interest in the company. GQG Partners, led by Rajiv Jain, funnelled a little over Rs 15,000 crore in the Adani group in March after the Hindenburg fiasco hit the ports to energy conglomerate.

Rajiv Jain co-founded GQG Partners, an investment management firm with $92 billion in assets under management. The firm is known for investing in stable and growing companies in the tobacco and energy sectors. Jain has recently invested $1.9 billion across four publicly listed stocks of Adani, indicating his confidence in the conglomerate’s future growth.

“There’s no question that the Adani Group has some incredible assets. And if you know that some of these assets are quite irreplaceable, they’re quite valuable going forward,” he said.

He also added, “Some investors, particularly Rajiv Jain in the US, have put quite a lot of money in Adani because he felt that they have incredible assets and in the long run, this will go well.”

Adani has a diverse portfolio of businesses, including renewable energy, ports, logistics, and mining. The company has been expanding rapidly in recent years, and its market capitalization has grown significantly, making it one of India’s most valuable companies. Adani’s growth has been attributed to the company’s strong management practices, innovative business models, and long-term vision.

Moreover, Adani has been committed to enhancing its corporate governance practices and ensuring transparency in all its operations. The company has implemented best practices to enhance the oversight of the board of directors and established robust reporting and compliance mechanisms. These measures have helped Adani attract global investors, who have shown confidence in the company’s commitment to ethical and sustainable business practices.