Adani: ‘Crisis creates opportunity’: Rajiv Jain on buying Adani shares

NEW DELHI: Rajeev Jainchairman Partners of GQG, has defended his company’s recent $1.87 billion acquisition of Adani Group shares despite concerns over governance standards and coal. Speaking to the Economic Times, Jain said his firm has invested in fossil fuels in the past and their job is to maximize returns within constraints set by clients.
Jain, however, clarified that he did not choose to buy GQG’s shares Adani the family’s trust in others; rather, it was the decision of the promoter family. He also noted that buying from a secondary offer is more efficient for logistical reasons such as timing. Jain stressed the importance of speed in these situations, because if the deal drags on too long, the word will inevitably get out, reducing the appeal of the deal.
When asked about GQG’s rationale for investing in the Adani Group, Jain noted that the firm has $5 billion in investments globally in various utilities that have a long tail and negative free cash flow as they grow as they earn wages. capital.
According to Jain, part of the problem with the Adani Group is that many people don’t fully understand how the profit side of the game is played. He also noted that most Adani Group companies have an EBITDA ratio of around three times, while US utilities average an EBITDA ratio of around 6-6.5 times. Jain believes that debt in regulated utilities is acceptable, but it is not suitable for cyclical businesses.
Shares of all Adani Group companies rose on Friday on news of GQG’s investment, with Adani Enterprises rising nearly 17 percent. In the last three trading sessions, the combined market value of the ten listed firms has increased by more than Rs 1.42 lakh crore.
Jain also shared that GQG has been aggressive in downtrends in the past, referring to the 2004 elections when the Indian market fell 25%+ and the entire market was depressed. In this case, Jane bought the stock by the fistful. He also noted the ITC crisis over the tax situation in which GQG invested in 1996 and held for more than 20 years.

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