Capital Group, among the world's largest investment-management firms, has bought stakes worth more than $2 billion across three Adani Group companies in recent weeks, while steadily paring its holding in Reliance Industries.
Mumbai, May 22. Signalling a shift in foreign investors' preference between India's two biggest business groups, Capital Group — one of the world's largest investment-management firms — has been increasing its exposure to Adani Group companies. The Los Angeles-based money manager has bought stakes worth more than $2 billion across three Adani Group companies in recent weeks. The move comes even as the firm steadily pares its holding in Reliance Industries.
Where it bought stakes
According to available information, on May 5 Capital Group bought nearly a 2 per cent stake in Adani Ports and Special Economic Zone Ltd. for Rs 74.86 billion (about $776 million) through open-market transactions. In addition, the investor has accumulated stakes of between 1.5 and 2 per cent in Adani Power Ltd. and Adani Green Energy Ltd. through market purchases. These deals have underlined the growing interest of large global investors in Adani Group companies.
A shift away from Reliance
Capital Group's move is not limited to raising its Adani investment; at the same time, the firm has been reducing its holding in Reliance Industries. According to the data, the firm held about 142 million shares in Reliance Industries at the end of March, compared with around 500 million six years earlier. This change reflects a shift in the preference of a major global investor between India's two biggest groups.
Why Adani's companies are attractive
According to analysts, Adani Group companies are increasingly seen as a 'leveraged' bet on India's infrastructure development, energy transition and manufacturing push. The group's strong presence in sectors such as ports, power and green energy makes it attractive to investors who are betting on India's long-term infrastructure growth. Government capital expenditure and policy priorities in these sectors have also boosted investor enthusiasm.
The broader context
This development comes at a time of large-scale capital flows and strategic restructuring in India's corporate world. Big global funds are balancing their bets across various groups and sectors to gain a share of India's growth story. A tilt from one group to another often depends on assessments of that group's valuation, growth potential and sectoral opportunities. In that sense, Capital Group's move is a notable example of the changing dynamics of foreign investment in the Indian market.
The Adani group's comeback
The investment comes at a time when the Adani Group has strengthened its financial position following the challenges it faced a few years ago. The group has focused on controlling its debt, boosting cash flows and keeping capital expenditure disciplined. Its businesses, spread across sectors such as ports, energy, cement and airports, have recorded strong operating income. The return of large global investors is being seen as a sign of growing confidence in the group's financial fundamentals and its long-term outlook.
A bet on the energy transition
The Adani Group has announced ambitious investment plans in green energy and the energy transition, including areas such as solar, wind and green hydrogen. Given India's clean-energy targets and rising power demand, these sectors are seen as key drivers of long-term growth. That is why companies such as Adani Green Energy and Adani Power are attracting global investors who want to bet on India's infrastructure and energy-transition opportunities.
What experts say
Market experts say such rebalancing should not be read as a final verdict for or against any single group, but rather as part of the continuous portfolio strategy of large funds. They stress that both groups are strong in their respective sectors and that investors periodically adjust their allocations based on valuation and prospects. Even so, the public disclosure of a bet this large does influence market sentiment.
What happens next
Following this development, investors and analysts will be watching the direction other large global funds take, and how institutional participation evolves in the shares of both the Adani and Reliance groups. More broadly, the trend signals that India's infrastructure and energy-transition story is attracting global capital, which will play an important role in shaping the direction of the market in the period ahead. For India's two largest conglomerates, the shifting preferences of marquee global funds are a reminder that investor confidence is continually earned through balance-sheet discipline, execution and growth visibility. As both groups pursue large investment programmes across energy, digital and infrastructure, the flow of foreign institutional money between them is likely to remain a closely watched barometer of sentiment toward corporate India.
