Legendary investor Mark Mobius said he shunned embattled Adani's share sale over debt concerns but he's still bullish on India
- Billionaire investor Mark Mobius said his firm avoided the share sale by Adani Enterprises that was later pulled.
- The debt load at Indian conglomerate Adani and its associates "sort of scared us away," he told Bloomberg.
Mark Mobius, a pioneer in emerging-markets investing, said his firm didn't take part in Adani Enterprises' stock sale before it was scrapped because it had concerns about the embattled Indian conglomerate's debt.
"It's all about debt. The company and its associates are heavily in debt, and that's what sort of scared us away," the founding partner of Mobius Capital Partners said in a Bloomberg interview Thursday.
Mobius said the problems surrounding Adani Enterprises and the Adani Group are specific to those entities.
"India is going to still go from strength to strength. It's an incredible country, incredible prospects, high-growth, young population. I think it's a typical scandal that you get in capital markets and it'll pass," he said.
Shares in Adani Enterprises, whose businesses range from energy to infrastructure to agricultural products, have plunged after US short seller Hindenburg Research released a bombshell report about the Adani Group. Adani Enterprises canceled a $2.5 billion share sale even after the offering was fully subscribed Tuesday with help from institutional investors.
Hindenburg said its two-year investigation of the company, led by Indian tycoon Gautam Adani, found it has engaged in "brazen stock manipulation" and an accounting fraud scheme over decades.
Mobius said banks are going to be more cautious as a result of the turmoil surrounding Adani.
"That will impact some of the highly indebted companies, but those companies that have strong balance sheets and low debt will continue to do well," he said.
Indian tycoon Gautam Adani has hit back against Hindenburg's report, calling it "maliciously mischievous" and "unresearched". The short seller in response has stood its ground on the accusations.
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