Adani Energy Solutions Ltd.

“Adani Energy Solutions owns legitimate regulated infrastructure in one of the world's best structural growth markets — India's power transmission and smart metering build-out — but the investment case is undermined by three compounding problems: a valuation that prices in perfection (77x trailing P/E, 7.4x P/B vs 9.7% ROE), leverage that no comparable utility accepts (10-12x Net Debt/EBITDA), and a governance structure where the Adani Group's history of opaque related-party transactions, the Hindenburg allegations, and the US DOJ indictment of the chairman (even if dropped) constitute a genuine permanent-loss tail risk for minority shareholders. The regulated business earns approximately its cost of capital — ROIC of 10-11% — making every rupee of growth debt-financed with no residual free cash flow. Base-case 10-year returns of 1.5-3x (~4-12% annualized) offer no compensation for the governance and leverage risks embedded in the structure. This is not a business to own at today's price.”