Adani Short Sale Story Not A Problem For India’s Stock Market

Adani Group, an Indian holding company that is heavily invested in the energy markets back home, is the latest target of emerging market short sellers. It’s problems, though, are not India’s problems. Investors should not consider this the Indian version of the “Evergrande” real estate default in China.

In BlackRock’s
BLK
iShares MSCI India (INDA
INDA
) exchange-traded fund, Adani’s companies, namely Adani Total Gas (1.1%), Adani Enterprises (1.08%), Adani Transmission (0.77%), Adani Green Energy (0.65%), Adani Ports (0.43%) and Adani Power (0.26%), all make up less than 4% of the fund. It is not a top holding in the Wisdom Tree India Earnings Fund (EPI). EPI and INDA have moved pretty much in lockstep over the last 12 months. Adani Enterprises, for example, is a runaway train. It’s up 79% over the last year while both the India ETFs are down by 8.8%. Over the last two years, Adani Enterprises is like the Indian bitcoin, up 470.9% — which is, in fact, much better than bitcoin (-32.4% over two years).