The Capital Group, one of the world’s largest investment management firms, has been steadily increasing exposure in the Adani Group while reducing exposure in Reliance Industries, this move reflects a significant shift, one between foreign investment in India’s biggest conglomerates as reported by Bloomberg.
As per sources to Bloomberg, The Capital Group has acquired stakes worth more than $2 billion across three Adani Group companies in recent weeks.
The Capital Group which oversees more than $3.3 trillion in assets globally, has taken 1.5% and 2% stakes in Adani Power Ltd. and Adani Green Energy Ltd via market purchases people familiar with the matter told Bloomberg, and on May 5th bought nearly 2% stake in Adani Ports and Special Economic Zone via a BSE block deal.
As per data compiled and reported by Bloomberg, Capital Group’s exposure to Reliance has declined sharply over the past several years. The firm held about 142 million shares in Reliance Industries at the end of March, compared with about 500 million six years earlier and a peak of 755 million in March 2017.
Experts believe these significant trends shifting have a deeper and broader meaning for India. They feel this move signals the confidence investors have in infrastructure-led growth in India as the Adani Group has businesses that are linked to India’s long-term economic ambitions such as airports, renewable energy, ports, power, logistics as well as data centers.
Some experts believe recent investment and exposure trends of foreign capital show how foreign investment is becoming more selective in India Inc, the fact that companies that are specialising or have many verticles such as manufacturing, energy and infrastructure are getting this focus seems to reinforce this belief. While some other experts feel that such shifts in exposure signal and showcase the broader transition toward bets on the next phase of India’s economic expansion.
Capital Group’s $2 Billion Adani Bet Signals Shift From Reliance
