Rajiv Jain, one of the biggest names in emerging-market investing, cut across the grain last month when he bought almost $2 billion worth of Adani Group stock.
These could be multibaggers” over five years, Jain said in an interview at Bloomberg’s New York headquarters. The term comes from mutual fund manager Peter Lynch’s book and describes an investment that could at least double.
Pushed Back
Jain said the Adani Group’s value lies in its assets. Indian Prime Minister Narendra Modi’s government is looking at tycoons like Adani — at one point Asia’s richest man — to improve the nation’s infrastructure and lure manufacturing from places like China. Many of the Adani Group’s projects are tethered to India’s development goals, and cut across multiple sectors of the economy.
“We believe the airport itself could be worth more than the company,” Jain told Bloomberg, noting that the land alone stretches across some of Asia’s most expensive urban real estate.
In a wide-ranging interview, Jain said he wasn’t fazed after a Jan. 24 report from Hindenburg Research detailed fraud across the Adani Group — accusing the conglomerate of “pulling the largest con in corporate history.” In March, GQG acquired shares in four of Adani’s firms from a family trust. He has expressed interest in exploring increasing GQG’s stake over time.
The Hindenburg report read like a “10-year-old newspaper,” Jain said. Though the allegations might look messy “from a Western point of view,” he said, they’re perhaps less problematic in the Indian business context.
That view is a motivating principle for other investments. In the interview, Jain was similarly optimistic about Latin America and companies like Petroleo Brasileiro SA, the large oil driller that’s come under pressure after a change of leadership in Brazil. China’s state-owned enterprises are another favorite, he said.
“One of the issues raised was that he owns more than 75% of the company, right? And let me ask you in real simple English, is that fraud?” Jain said. “Is it not disclosed properly? Yeah, it’s some of that, you could argue that, but is it fraud?”