The Adani group faces challenges in the stratospheric valuations of its listed companies and allegations of the means by which they reached such levels. This has hurt the group’s credibility to raise funds through issuance of equity capital. Adani’s difficulties in raising capital could delay the long-awaited revival of the private investments cycle.
India will underperform in the medium term due to Foreign Institutional Investors (FIIs) selling and premium valuations compared to its emerging market (EM) peers. However, we feel that it is a good time to consider stock ideas in the small caps category with value buying as the theme.