Mark Mobius: Modi can't be blamed for what’s happening with Adani

On January 24, US-based Hindenburg Research accused the Adani Group of ‘accounting fraud and stock manipulation’, following which Opposition political parties pointed fingers on the NDA-led government. Meanwhile, several banks have come out with statements clarifying that they have low exposure to Adani loans.

According to Mobius, Hindenburg’s accusations against the conglomerate will have insignificant impact not only on the political landscape but on equity markets as well.

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“Adani companies account for only 6 percent of the index. I don’t think this issue is going to have an impact on what people think about India. At the end of the day, you are not buying the index, you are buying individual companies,” he said.

That said, he has stayed away from investing in them because of the high debt. In general, he advises investors to stay away from infrastructure companies.

“These (infra) companies borrow heavily to finance projects that earn generate no money in the short-term during construction phase. On the flip side, the interest on the loans grows at a fast pace,” Mobius said.