Adani gets $1.87 bn investment from GQG

Some good news for Adani lovers.

US boutique investment firm GQG Partners has bought shares worth $1.87 billion in four Adani group companies, marking the first major investment in the conglomerate since a short-seller’s critical report sparked a stock rout. Jefferies India was the sole broker for GQC’s transaction.

The group’s seven listed companies have lost some $135 billion in market value since January 24, when Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation—allegations the billionaire Gautam Adani-led group has denied but led it to call off a $2.5 billion share sale.

SB Adani Family Trust sold about 21 crore shares worth Rs 15,446 crore in Rupee terms in four Adani Group companies — Adani Enterprises, Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Transmission. The shares were acquired by US global equity boutique firm GQG Partners, which is listed on the Australian Stock Exchange and manages more than $92 billion in client assets as of January 31, 2023.

U.S-based, Australia-listed GQG has, through block deals, bought shares of Adani Ports and Special Economic Zone — considered the group’s crown jewel — at a 4.2% discount to Thursday’s close, resulting in a 4% stake. It bought Adani Green Energy and Adani Transmission at a 5.7% discount for stakes of 3.5% and 2.5%, respectively, and flagship Adani Enterprises at a 12.2% discount for a 3.3% stake.

Rajiv Jain, chairman and CIO of GQG Partners, said: “I am excited to have initiated positions in the Adani companies. Adani companies own and operate some of the largest and most important infrastructure assets throughout India and around the world. Gautam Adani is widely regarded as among the best entrepreneurs of his generation. We believe that the long-term growth prospects for these companies are substantial, and we are pleased to be investing in companies that will help advance India’s economy and energy infrastructure, including their energy transition over the long-run.”

Jugeshinder Singh, group CFO of Adani Group, said: “We are delighted to complete this landmark transaction with GQG. We value GQG’s role as a strategic investor in our infrastructure and utility portfolio of sustainable energy, logistics and energy transition. This transaction marks the continued confidence of global investors in the governance, management practices and the growth of Adani portfolio of companies.”

The investment comes as Adani has sought to calm investors, including by holding a fixed-income roadshow in Singapore and Hong Kong. The group has told creditors it has secured a $3 billion loan from a sovereign wealth fund.

A Goldman Sachs fund has also bought shares worth $138 million in Adani Green, $280 million of shares in Adani Ports, and $67 million of shares in Adani Transmission, stock exchange data showed on Thursday.

For the short-term, this will definitely be a big positive for the sentiment for Adani stocks given a chunk of shares being bought by big investors. But in the longer term market is going to look at how growth is going to come.

The market will also watch for the results of an investigation by market regulator for any lapses by the group related to public shareholding norms or regulatory disclosures.