Mutual Fund beats rivals by betting big on Adani shares

According to data from Bloomberg, with assets of around Rs 921 million ($11.3 million), Quantum Fund has delivered over 12% returns this year, thanks to its biggest pick Adani Enterprises Ltd and outperforming 99% of peers .

“We realized they had very good operating leverage across most of the businesses they built,” Sandeep Tandon, founder and chief investment officer at Quant Group, said in an interview last week. “So it’s not just about looking at the leverage aspect. The market is not looking at potential cash flow.”

A surge in Adani Group shares propelled Gautam Adani to become the world’s third-richest person, while some investors balked at the power group’s debt-fuelled expansion from its ports and the lack of broad coverage by research analysts.

Adani Enterprises And Adani Ports and Special Economic Zone Ltd., as per data from Bloomberg, accounts for over 15% of the Quantum Fund’s portfolio.

Shares of Adani Enterprises climbed over 100% this year, compared to a nearly 3% decline in the benchmark S&P BSE Sensex index.

Tandon, whose conglomerate manages more than $1 billion in assets, said, “People are very satisfied in life, which is why sometimes jewels or multi-baggers are not looked at by analysts.” “Analyst reports are usually generated at the peak of the cycle,” and they come “as late as a community.”

Ownership of Adani-controlled shares by a Mumbai-based asset manager is rare because the companies, despite their exceptional upside, have far less exposure than top mutual funds.

“People prefer to be part of safe stocks and analysts as a community do not want to make serious efforts to spot opportunities,” said Tandon, who has nearly three decades of experience in capital markets in India.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.