Whalesbook
Global investment giant The Capital Group is strategically increasing its holdings in key Adani Group entities while divesting from Reliance Industries, reflecting a notable shift in foreign investor sentiment towards India's major conglomerates. Sources indicate The Capital Group has invested more than $2 billion across three Adani companies in recent weeks.
Adani Group Stakes Ascend
On May 5, The Capital Group secured a nearly 2% stake in Adani Ports and Special Economic Zone through open-market transactions, valued at 74.86 billion rupees ($776 million). Further market purchases have led to the accumulation of 1.5% to 2% stakes in both Adani Power and Adani Green Energy. These Adani firms are increasingly seen as leveraged plays on India's burgeoning infrastructure development, energy transition, and manufacturing ambitions.
Over the past year, Adani Power shares have jumped 94%, Adani Green Energy surged 35%, and Adani Ports climbed 25%. This increased investor confidence in the Adani Group follows recent positive developments, including the US Justice Department's move to drop criminal charges against founder Gautam Adani, alleviating a significant legal overhang.
Reliance Industries Exposure Wanes
In contrast, The Capital Group's stake in Reliance Industries has diminished substantially. The firm held approximately 142 million Reliance shares at the end of March, a significant decrease from about 500 million six years prior and a peak of 755 million in March 2017. While Reliance remains a closely watched company among global funds, its recent growth and stock performance have moderated following extensive expansion in telecommunications, retail, and energy sectors. Reliance Industries shares have seen an 8.36% decline over the past year.
A spokesperson for The Capital Group declined to comment on specific shareholdings, and the Adani Group did not immediately respond to requests for comment.