GQG's Rajiv Jain Does Not See 'Cyclicality' Risk In Adani Infrastructure Assets — BQ Exclusive

Infrastructure assets can sustain higher leverage because of a hockey stick of earnings coming through in later years, GQG Partners LLC Chairperson Rajiv Jain has said.

"Infrastructure investing tends to be a little bit different than your consumer staples," Jain said in an interview to BQ Prime's Niraj Shah. "There's a long gestation period, you have to invest upfront; you get a regulated rate of return."

GQG Partners is betting on the execution ability of the Adani Group. He has bought into a conglomerate led by "an entrepreneur who does a phenomenally good job in execution", Jain said.

Jain was also "not surprised" by the "clean chit" to the Adani Group by the Supreme Court-appointed panel in the Hindenburg short selling saga.

Infrastructure assets have a long tail and after the initial setup, one can get very steady returns, he said. "There is a 20–25-year visibility, which is why we feel that most of the Adani Infrastructure companies we have invested in, we are not taking any economic cyclicality risk."

Jain said utilities and infrastructure are by nature, levered. "Once you've invested in those over time, the earnings certainly are very, very high and hence, they can sustain high leverage".

India has a "ridiculous" total addressable market as the "competent" private sector can compete with "inefficient companies " owned by the State, according to Jain.

Access to long-term stable capital is why the laundry list of failure on the infrastructure side is long, according to Jain. "But the thrust of the government has made a big difference in making this possible."

Watch the full conversation here:

Disclaimer: AMG Media Networks Ltd., a subsidiary of Adani Enterprises Ltd., holds 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.