India is making its way onto global investors’ maps. How the country’s financial authorities tackle the $65 billion selloff at Gautam Adani’s eponymous infrastructure empire following a short-selling attack may determine how soon the country establishes itself as a reliable investment destination.
For those who passively track stock market indexes, the controversy engulfing Adani, briefly the world’s third richest man, may act as a deterrent from an already expensive market. Companies in the MSCI India Index, where the tycoon’s companies have an almost 5% weighting, trade on an average multiple of 21 times forecast earnings for the year ahead, compared to 12 times for MSCI’s broader emerging markets benchmark.
at credit rating agencies to instil better market discipline. How the former banker handles Adani will make a big impact. In the meantime, the turmoil is a reminder to investors of the danger of investing blindly in emerging markets.Follow @ugalani and @ShritamaBose on TwitterShares of the Adani group companies have lost $65 billion since Jan. 25 after U.S. short-seller Hindenburg Research published a research note on the group.
Adani on Jan. 29 published a 413-page response to Hindenburg’s report, which alleged the Indian group was “pulling the largest con in corporate history” including “brazen stock manipulation and accounting fraud”.
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