Rajiv Jain executed one of the most profitable trades in Indian equities when few others dared. In March 2023, five weeks after Hindenburg Research’s report erased $150 billion from the Adani Group’s market value, GQG Partners purchased ₹15,446 crore worth of shares across four Adani companies. The investment proved successful—by June 2026, GQG sold over ₹12,000 crore of its holdings.
The timing drew attention. That same quarter, U.S. regulators concluded three major investigations into the Adani Group. The Department of Justice dismissed its criminal bribery case against Gautam Adani. The SEC settled a disclosure matter with Adani Green for $18 million. The Treasury’s sanctions unit ended its probe into LPG shipments for $275 million. The legal uncertainty that had loomed since late 2024 dissipated almost entirely. Then GQG exited.
The MSCI effect
MSCI’s August index review may deliver additional positive developments. Adani Green Energy and Adani Energy Solutions appear likely to join the Standard Index, which would generate $773 million and $342 million in passive inflows, respectively. The adjustments take effect August 31.
One explanation is straightforward. Jain bought low and sold high. A fund manager acquiring a distressed asset at a discount and exiting once the discount vanished fulfilled his role. The DOJ’s withdrawal indicated the controversy had ended, and the upcoming index inclusion ensured demand. Selling ₹5,748 crore of Adani Enterprises and Adani Energy Solutions in a single day required a well-funded buyer. Passive inflows provided exactly that.
Under this interpretation, GQG did not lose confidence in Adani. The firm exhausted its potential gains and chose the moment when another investor was compelled to step in.
A cleaner shareholder base
A different perspective reverses the sequence. MSCI’s long-standing concern with Adani involved the shareholder register, not the balance sheet. In February 2023, the index provider reduced the free-float designations of four Adani stocks after questioning whether a cluster of Mauritius funds qualified as public shareholders. Adani Enterprises’ free float declined from 25% to 15%. Adani Transmission’s dropped to 10%. The decision signaled that shares available to global investors were fewer than filings indicated.
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When MSCI excluded Adani Energy Solutions in May, it cited the stock’s surveillance status. Those restrictions have since been removed—no Adani company remains under ASM or GSM. The stated barrier disappeared. Yet the underlying issue remained concentration. A register where a single foreign manager held 4.9% of a company and a few offshore funds controlled much of the rest did not constitute a deep float, regardless of the calculations.
The exit altered the setting. Domestic institutional ownership of Adani Energy Solutions now stands at 11.77%, surpassing the foreign figure. In Adani Enterprises, mutual fund holdings rose from 2.71% to 5.40% in one quarter. The shareholder base is now more balanced than at any point since 2023. The sale did not merely coincide with the improvement—it enabled it.
A less favorable interpretation exists, unrelated to Adani. GQG faced difficulties in 2026. The firm experienced $15.1 billion in net outflows during the first half, including $5.2 billion from emerging markets. Funds under management fell to about $156 billion by the end of June, down from $163.3 billion.
A manager dealing with such large redemptions sells what is possible, not what is preferred. Adani, after a three-year rally and with an index event approaching, was the most liquid asset on the books. If the block deal dates align with GQG’s monthly flow disclosures, the narrative shifts from Adani to the firm’s need for liquidity.
The handover
Regardless of the reason, the outcome remains consistent: Adani risk is transitioning from foreign to Indian hands. SBI Mutual Fund, the country’s largest asset manager, acquired much of GQG’s stake, using funds from systematic investment plans. Meanwhile, LIC reduced its Adani exposure, trimming its group holdings to approximately ₹48,285 crore in equity and debt. The state insurer, once a stabilizing force during the group’s crisis, is stepping back.
The shift was not part of a coordinated strategy. It resulted from a distressed foreign investor meeting redemptions, a state insurer rebalancing its portfolio, and a domestic fund industry awash with inflows but lacking compelling opportunities.
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The transition concluded in June. The peak arrived in early July. Adani Ports reached a record ₹1,891.80 on July 3 before dropping 11% to ₹1,679 this week. Adani Green, up 80% in six months, hit ₹1,631.50 in July and now trades at ₹1,364, down 16% from its high. Adani Enterprises has moved sideways since late July, while Adani Power showed little change. On Monday, every listed Adani company closed lower.
Year-to-date performance remains strong for some. Adani Energy Solutions gained 55%, Adani Power 40%, and Adani Green 33%. Adani Enterprises rose 32.5%. Most of those increases occurred before July. Two of the group’s eight listed companies, Ambuja Cements and ACC, fell about 22% for the year. Adani Ports, the most institutionally held stock in the group, advanced only 13%.
SBI Mutual Fund, which purchased Adani Enterprises at ₹2,913.40 and Adani Energy Solutions at ₹1,504.80 on June 6, remains above water. Both stocks trade above those levels today, with Adani Energy Solutions up nearly 8%. The issue is not the block price. The rally continued for another four weeks after GQG’s departure, drawing in domestic money at higher valuations before stalling. The marginal buyer—the SIP investor who arrived in July on the strength of the DOJ headlines—now holds the top.
The rally did not end due to sentiment. Adani Enterprises reported a consolidated net loss of ₹1,160 crore for the June quarter, compared to an ₹885 crore profit a year earlier, even as revenue climbed 50% to ₹32,924 crore. Bernstein downgraded Adani Green to “underperform” with a ₹1,000 target, the lowest on the Street, arguing that value is shifting from renewables to transmission. The group also increased its capex guidance from ₹1.53 lakh crore last year to about ₹2.1 lakh crore this year, part of a $125 billion five-year plan.
The legal risk has vanished. Execution risk has taken its place, and the market is adjusting. GQG still holds roughly ₹38,200 crore across five Adani companies—close to two-thirds of its entire disclosed Indian portfolio. Jain has not exited entirely. He has simply made space for others.