MUMBAI – One of the biggest names in emerging market investing is betting US$1.87 billion (S$2.5 billion) on Indian tycoon Gautam Adani’s empire, in the most significant show of support from a major money manager since a short-seller report lopped US$153 billion off the conglomerate’s market value.

Mr Rajiv Jain’s GQG Partners bought shares in four firms from an Adani family trust at discounts to Thursday’s closing prices, according to a statement from the Adani Group and exchange filings.

Mr Jain’s investment comes as a vote of confidence at a crucial time for the beleaguered group, which has spent the past few weeks trying to repair an image damaged by Hindenburg Research’s accusations of accounting fraud and share price manipulation.

The Adani Group will hold additional fixed income meetings with investors after such gatherings this week in Hong Kong and Singapore. It will hold meetings from March 7 to 15 in Dubai, London and the United States, according to a person familiar with the matter.

Adani is a bold wager for Mr Jain, the chairman of GQG, who is known to broadly prefer safe, defensive stocks of companies that have what he calls bulletproof balance sheets.

Born and raised in India, Mr Jain made his name as a star emerging market fund manager at Swiss firm Vontobel Asset Management. He later co-founded GQG and built it into a US$88 billion powerhouse with investments in industries like oil, tobacco and banking.

In 2022, when most asset managers watched clients yank cash from their funds as markets cratered, Florida-based GQG thrived. The firm lured US$8 billion in fresh investment and three of its four flagship funds beat benchmark indexes by wide margins.

In an interview on Thursday, Mr Jain said he first looked at Mr Adani’s ports-to-energy empire over five years ago, but that, until recently, the shares were not enough of a “bargain” to take a position.

All 10 Adani Group stocks climbed in early trading in Mumbai on Friday, with flagship Adani Enterprises rising as much as 10 per cent to head for its highest close since Feb 16. The stock surged more than 30 per cent in the previous three sessions.

Adani Total Gas has been hurt the most among the 10 group stocks in the rout, plunging more than 80 per cent, while the flagship’s shares have lost over half their value.

Valuations for the group have similarly slumped. Adani Enterprises is trading at less than half of its 12-month forward earnings, while multiples for Adani Transmission and Adani Green Energy are down by more than two-thirds.

“What is missing here, what nobody talked about, was these are phenomenal, irreplaceable assets,” Mr Jain said. “You have to be greedy when people are fearful.”

GQG bought shares of Adani Ports and Special Economic Zone – considered the group’s crown jewel – at a 4.2 per cent discount to Thursday’s close, resulting in a 4 per cent stake. It bought Adani Green Energy and Adani Transmission at a 5.7 per cent discount for stakes of 3.5 per cent and 2.5 per cent respectively, and Adani Enterprises at a 12.2 per cent discount for a 3.3 per cent stake.

The least surprising of GQG’s bets is probably Adani Ports, which has been touted by investors for its strong operations.

Mr Jain said his team met Adani management last summer, and that he sees the investment helping advance India’s economy and energy infrastructure, including energy transition goals.

Regulated assets

In a Feb 23 interview with Bloomberg TV, Mr Jain said that while Adani’s implosion did not change his view on India as a whole – where GQG is overweight – “Adani, specifically, is a different call to make”.

These are “regulated assets” unlike Enron, he said, adding that India’s “banking system is fine”.

While GQG’s investment should help provide “tactical support” for the battered Adani stocks, investors will wait for the conclusion of a court-ordered probe into Hindenburg’s allegations against the group, said Bloomberg Intelligence strategist Nitin Chanduka.

India’s Supreme Court on Thursday set up a six-member panel to investigate the bombshell report. It also asked the Securities and Exchange Board of India to look into any manipulation of Adani stocks and report its findings within two months.

The Adani Group said it welcomed the order, and that it would “bring finality in a time-bound manner”.

Desperate to sell

The support from GQG could stem further declines in the near term, but the discounts also show that the seller was desperate, said Mr Abhay Agarwal, fund manager at Piper Serica Advisors.

When asked if the Adani trust was desperate to sell, Mr Jain disputed the characterisation, noting that some of the stocks had rallied more than 30 per cent from recent lows.

Mr Jain has confidence in the conglomerate and said that GQG’s “edge” was understanding better than others how utilities operate.

He pointed out that Adani Enterprises had generated returns of about 30 per cent a year in US dollar terms since it was listed in 1994, outperforming some of the best-known companies in the world.

“What would you say that company is?” Mr Jain said. “I am just stating you don’t have frauds lasting 30 years, generally.” BLOOMBERG