GQG Partners ups stake in two Adani cos to above 5%, shows confidence

US-based boutique investment firm GQG Partners has boosted its stakes in two Adani Group companies to more than 5 per cent in signs of its confidence in the group despite the damning report of a short seller in the US.

On 28 June, GQG bought $1 billion (Rs. 8,265 crore) additional stakes in group flagship company Adani Enterprises Ltd and renewable energy company Adani Green Energy Ltd.

The stake in Adani Enterprise was sold through a single transaction, with GQG buying Rs 1.79 crore, or 1.58 per cent, more shares to reach 6.15 crore shares or 5.4 per cent of the total, according to exchange filings.

A separate file showed billionaire Gautam Adani and his brother Rajesh S. Adani sold shares of the Meadows family. This reduced the Adani family’s stake in Adani Enterprises to 67.65 percent from 69.23 percent previously.

In Adani Green Energy, GQQ has bought 4.47 crore or 2.82 per cent additional shares to reach 10.35 crore shares or 6.54 per cent of the total, filings show.

The filings did not say the acquisition price, but sources familiar with the matter said the investor bought $500 million worth of promoter stakes in each of the two companies.

GQG Partners has been ramping up its investment in the conglomerate since Hindenburg Research, in a report peppered with alleged accounting fraud and share price manipulation in the conglomerate, led to a stock market rout that wiped about $150 billion from its market value to its lowest point. a point.

The Adani Group has denied all of Hindenburg’s allegations and is planning a comeback strategy that includes reframing its ambitions, canceling acquisitions, prepaying debt to address concerns about cash flow and borrowings, and scaling back spending on new projects.

In March, the promoters sold ₹15,446 crore ($1.87 billion) worth of stakes in four companies of GQG Partners. GQG boosted this investment with an additional $400-500 million worth of shares in May.

Prior to the acquisition on June 28, GQG owned ₹4.35 crore or 3.82 per cent stake in Adani Enterprises Ltd and 5.88 crore or 3.72 per cent stake in Adani Green Energy Ltd.

GQG’s investments anchored Adani Group’s recovery from losses inflicted by the Hindenburg, although all 10 companies are still trading below levels prior to the Jan. 24 report.

Sources said the block trade in Adani Enterprises was trading at 2,300 rupees per share, on top of the closing price of 2,281.75 rupees on the Bahrain Bourse on June 27. For Adani Green, the trades are priced at Rs 920 to Rs 924.75, which is a discount. to the June 27 closing price of Rs 959.90.

On Friday, Adani Enterprises closed at Rs 2,383.60 while Adani Green closed at Rs 945.60 in BSE.

Of the $1.87 billion that GQG first invested on March 2, $1 billion was in Adani Enterprises ($640 million) and Adani Green Energy Ltd ($330 million).

Later, it also made some open market purchases in the group companies in the following months.

The previous purchase was at Rs 1,410 per share in Adani Enterprises, and that in Adani Green Energy Ltd was at Rs 504 per share.

In May, the boards of Adani Enterprises Ltd and electricity transmission company Adani Transmission Ltd agreed to raise up to ₹21,000 crore (more than $2.5 billion) through equity sales to qualified institutional investors.

The share sales come months after Adani Enterprises was forced to abort a follow-up Rs 20,000 crore public offering (FPO) in the wake of the Hindenburg report.

The show was fully subscribed, but the company returned the money to the subscribers.

The money raised by the Adani Group will be used to reduce debt and finance the group’s expansion projects.

The sources said GQG’s bet on Adani was mainly due to the group’s emergence as the largest and fastest growing developer of critical infrastructure. Adani’s portfolio provides a comprehensive view of India’s growing infrastructure topic with no equivalent alternative.

They said the group’s flagship and incubator Adani Enterprises Ltd is developing businesses such as airports, roads (transport and logistics), data centers, green copper and hydrogen, which could unlock huge value over the next 5 to 15 years for its investors.

Its incubator model has a 100 percent success rate in building unicorns, and has built unicorns such as Adani Transmission, Adani Power, and Adani Ports & SEZ. The combined market capitalization of these four companies alone is $62 billion – nearly double the incubator’s market cap.

The administration has said, in the recent past, that it will list airports and road companies separately in the next 3-4 years.

Adani Green has emerged as the largest and fastest growing renewable energy player in India. Its green energies have grown at a 33 percent compound annual growth rate over the past five years, outperforming the industry average of 15 percent.

Currently, its renewable energy portfolio is 20.4 GW (8.2 GW in operation and another 12.2 GW under construction and close to construction projects). It is targeting a portfolio of 45 gigawatts by 2030.