Samir Arora believes the Adani group story will see the return of institutional comfort around owning the stocks, after the removal of regulatory concerns. Speaking to NDTV Profit, the founder of Helios Capital said many global and domestic investors had long viewed Adani companies as fundamentally attractive businesses but were reluctant to buy them because of internal governance concerns and the questions that followed the Hindenburg episode.
Shares of Adani Enterprises and all other Adani group stocks are trading in the green on Tuesday after the US Department of Justice dropped all charges against Gautam Adani and his nephew Sagar Adani, closing the case permanently.
“We always had Adani Ports and Special Economic Zone in our portfolio, even from the days when the Hindenburg report came out,” Arora said. According to him, the stock was never the issue. Institutional hesitation stemmed from compliance and oversight committees that were wary of approving investments in companies surrounded by controversy.
ALSO READ: US Justice Dept Drops All Charges Against Adani, Case Closed Permanently
“Many FIIs and mutual fund managers I met knew that Adani Ports was a very good asset, that Ambuja Cements is easy to understand as a good asset, but they would say, ‘We can't buy because our board will ask questions,'” he said.
That hurdle, Arora believes, is now beginning to disappear. Recent regulatory clearances have helped restore confidence, but he said an equally important signal has come from large institutional investors. The visible buying by one of India's largest mutual funds and a major foreign institutional investor has created what Arora described as a form of validation for investors who were already interested but lacked the internal approval to act.
“I think that gives room to others who wanted to buy,” he said. “They can now go back to whoever had stopped them and say, look, these guys bought it.”
“I think these stocks will now be considered normal stocks,” he said. “And if they are considered normal stocks, everybody will own them.”
ALSO READ: All Adani Stocks Trade In The Green After Clean Chit From US Justice Dept
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