Los Angeles-based Capital Group, which deals in assets valued at $3.3 trillion, has been one of the biggest betters on Adani Group companies, investing more than $2 billion in a continuing rally in India’s market. Capital Group bought a nearly 2% stake in Adani Ports for $776 million on May 5.
It also acquired 1.5-2% positions in Adani Power and Adani Green Energy, expanding even more in its exposure to the conglomerate. Investments in it were made at a time in which Adani companies are doing well in 2023. Shares of Adani Enterprises and Adani Ports have surged over 20 percent this year, far outperforming the Nifty 50 index, down 10%.
The rally is fueled by robust cargo growth from ports, the expansion of airports and aggressive green energy projects that have enhanced investor confidence in the group, analysts say. The move also brought a rebound for Adani following a damning Hindenburg report last year, which had driven its share price plunges and calls into question the company's governance.
But with the likes of Capital Group in Adani’s corner, the conglomerate would seem to have reasserted global credibility. But the investments have not been free of controversy. Jairam Ramesh, the leader of the Congress, derided the deals as favoritism in their deals, one of which included the Coastal Energen deal.
Those investments reflect political and corporate nexus, he contended, not market‑informed confidence. This was in contrast to the complaints, however, given the inflow of money from one of the biggest asset managers anywhere in the world, signaling the increasing attractiveness of Adani’s diversified portfolio.
The group is cemented as a key player in India’s economic growth as it invests through targeted infrastructure and renewable energy space investments. For Capital Group, the investment is a cautious wager on India’s long‑term growth story of which Adani’s high-minded plans are the core.
Amid the controversy, the partnership between Capital Group and Adani signals a novel phase in the conglomerate’s odyssey one that will marry the globality of capital with India’s grand aspirations for large infrastructure while facing politically contentious situations at home.
