NRI investor Rajiv Jain’s investment in Adani stocks has made headlines, as his bold bet on troubled Adani stocks has yielded him a substantial return of 20% or over Rs 3,100 crore in just two days.
Jain, who owns GQG Partners, invested Rs 15,446 crore in four Adani stocks, namely Adani Enterprises, Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Transmission, after a month-long slump in Adani stocks following a negative report by Hindenburg Research.
Despite accusations of stock manipulation and accounting fraud, Jain believed that the long-term growth prospects of Adani’s companies are substantial. His investment in Adani Enterprises, for instance, has earned him a profit of Rs 1,813 crore since Thursday, as the stock price has increased by 33%. Similarly, his investments in Adani Ports, Adani Green Energy, and Adani Transmission have also earned him substantial profits.
Jain’s success in this investment has been remarkable, considering the recent controversies surrounding Adani’s companies. Nevertheless, his decision to invest in Adani stocks has not come without risks, as GQG Partners’ shares, listed in Australia, ended 3% lower on Friday following the investment.
This suggests that Jain’s investment in Adani companies has not been entirely immune to the risks associated with investing in companies facing controversies.
Furthermore, the sale of a part of the stake in Adani companies by the promoter entity SB Adani Family Trust suggests that there may be underlying financial issues associated with Adani’s businesses. However, Jain sees this as an opportunity to purchase “fantastic assets” at an attractive price, which could potentially yield significant long-term returns.
Evaluation Of Investment Of Rajiv Jain In Adani Enterprises
Jain’s investment in Adani stocks has been a calculated risk, which has paid off handsomely in just two days. However, the risks associated with investing in companies facing controversies cannot be overlooked, and it remains to be seen whether Jain’s investment in Adani companies will continue to yield such substantial returns in the long run.
The combined market value of 10 Adani stocks has dropped by over Rs 10.65 lakh crore since late January. However, in the last four days, Adani stocks have shown a significant recovery due to news of the GQG deal and the conglomerate’s prepayment of loans. This investment has led to the belief that Adani stocks have stabilized and can raise capital at current prices.
Naveen Kulkarni, Chief Investment Officer of Axis Securities PMS, has stated that the promoters can use the money raised through this transaction to infuse capital in any group company requiring funds through warrants, rights issues, or any other instrument. This development will also improve market sentiment and increase retail participation, which had decreased due to uncertainty.