Adani-Hindenburg Short-Selling Saga May Restrict Access For Some Banks: GQG's Rajiv Jain — BQ Exclusive
'There's no problem in short selling, but to go on and rattle a cage can have business implications that can be problematic.'
The investigation into the Adani-Hindenburg case may restrict access to India for certain short-selling banks, according to Rajiv Jain, chairperson at GQG Partners LLC.
"There's no problem in short selling, but to go on and rattle a cage can have business implications that can be problematic," Jain told BQ Prime's Niraj Shah.
However, he said that short selling is part of the market and helps create opportunity for investors. "For the market to exist, there has to be two opinions," he said. "There's no market if everybody agrees."
Jain said the investment firm has an aggregate stake worth (on cost basis) of $2.3–2.4 billion invested in the conglomerate owned by billionaire Gautam Adani. "We were getting fantastic assets at a very attractive valuation then."
U.S.-based short seller Hindenburg Research's report alleged fraud and stock manipulation by the Indian conglomerate, causing the group stocks to plunge. The Adani Group dismissed the claims as "malicious", saying that the report was aimed at damaging Adani Enterprises Ltd.'s follow-on public offer, which was subsequently withdrawn.
The group stocks have recovered nearly 60% of the losses suffered after the Hindenburg report.
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