Investing 03-03-2023 09:14 11 Views

Adani share price is rising as $88 billion hedge fund manager gets greedy

Adani Enterprises (NSE: ADANIENT) share price has staged a strong recovery as investors increase their bets in the company. The stock has risen in the past four straight days and is trading at the highest level since February 16. It has soared by more than 76% from its lowest point this year.

Why Adani stock is soaring

The main reason why the Adani Enterprise stock price is surging is that one of the best-known emerging market investors has made a big bet on the company. Data shows that Rajiv Jain has invested almost $2 billion in the company. His investment is spread across Adani Enterprises, Adani Ports, Adani Transmission, and Adani Green Energy.

This is a notable move considering that Jain, who made his name at Vontobel, is one of the best investors in the world. He is the founder of GQG Partners, a company with over $88 billion in assets under management. News of his investment was first reported by Bloomberg.

Therefore, Adani shares jumped as investors joined Jain’s move. Historically, investors tend to join the lead of well-known investors. This also explains why Salesforce stock price is outperforming the Dow Jones after a group of activist investors have joined in. In a statement, Jain said:

“What is missing here, what nobody talked about, was these are phenomenal, irreplaceable assets. You have to be greedy when people are fearful. Whenever there are parties going on, we stand on the sidelines watching people dance most of the time.”

The other reason why Adani stock has pumped is that Gautam Adani has gone to the offensive. In multiple statements, the firm has reaffirmed that its finances were doing just fine. It has also announced measures to slow its growth and be fiscally conservative.

Adani Enterprises share price

Adani enterprises share price chart

It seems like Jain read my article on Adani, in which I made the contrarian case for the stock. My view was that Adani owned some good assets and the fact that Hindenburg’s report did not cite any financial impropriety. Instead, the short-seller argued that the company was using offshore funds to manipulate its stock.

I also believe that Adani’s rebuttal of Hindenburg’s report was relatively solid. Therefore, While bears seem to be in the pilot seat, I believe that the stock will see some upside in the coming months. If this happens, the Adani Enterprise share price will likely rebound to the key resistance at 2,168 INR.

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