Adani wipe-out hurts but won't derail foreign investor faith in India

Financiers don't see systemic risk from bribery charges against conglomerate

Worries of a wider spillover from bribery charges against the Adani Group will hurt sentiment in India but not the long-term outlook, global investors say, as they wager one of the world's best-performing markets will get back on track next year.

US allegations, denied by the company, are that Gautam Adani's colossal ports-to-energy conglomerate paid bribes to secure power sales and made misleading disclosures, roiling the stocks and debts of Adani companies.

Investors expect a stronger spotlight on governance and disclosure, and perhaps some volatility, but say the affair has not challenged the reasons they are in India in the first place - for exposure to a growing economy and a huge consumer market.

"Foreign investors may grow more cautious about the transparency and governance practices of Indian companies," said Mr Steve Lawrence, chief investment officer at Balfour Capital.

Still, he pointed to a roughly 3 per cent rise in the Nifty 50 index since the Adani news broke as signalling confidence. In the same period, US$14 billion (S$18.7 billion) has been wiped off the value of shares in 10 companies owned by Adani.