When it comes to stock picking, the rule of thumb is to go for companies with very low or zero debt, said Mark Mobius, a veteran emerging markets investor. Mobius said in a tweet that he was confident in the Indian stock market. India has huge potential, he said, with abundant talent and great companies, India has immense potential.
Mobius said that the domestic market was reeling under heavy selling pressure, led by a steep fall in Adani group stocks, due to allegations of stock manipulation and accounting fraud on the Adani group by Hindenburg Research. There were a number of allegations and counter-allegations. A couple of institutes have issued clarifications about their exposure to the Adani group. Adani Group, on the other hand, withdrew India's biggest follow-on public offer FPO by Adani Enterprises. It has a number of prepayments of its loans to allay investor concerns.
With the tweet, Mobius also tagged his last week's email interview with Bloomberg, where he said his firm didn't participate in Adani Enterprises Rs 20,000 crore FPO before it was withdrawn because concerns over the group debt scared us away. Mobius said that they were not interested in Adani companies because they did not meet our investment criteria, particularly as regards to debt. Mobius said the investor retreat is an Adani problem, as a result of the Hindenburg report, in a Bloomberg TV interview later on Thursday. He told Bloomberg that India is an incredible country with incredible prospects.
He told Bloomberg that it was just one of the typical scandals you get in capital markets.
JPMorgan, for other reasons, has a strong relationship with JPMorgan.