Companies
GQG pumps up to $500mn more into Adani group cos
Summary
On 2 March, the Adani group disclosed that GQG had invested ₹15,446 crore ($1.87 billion then) across flagship Adani Enterprises ($660 million), Adani Ports ($640 million), Adani Transmission ($230 million) and Adani Green Energy ($340 million)Mumbai: GQG Partners, which invested $1.87 billion in four Adani group companies in the first week of March, has pumped in another $330 million-$530 million into these companies since then, demonstrating the investor’s continued interest in the ports to renewable energy conglomerate.
“Our overall shareholding (the number of shares we own) in all companies is higher than 3 March," Rajiv Jain, chairman, CIO and portfolio manager GQG Partners said in response to an email. “Total investments at cost is close to $2.2-2.4 billion approximately in over a dozen separate accounts....we own these (shares) in multiple accounts."
On 2 March, the Adani group disclosed that GQG had invested ₹15,446 crore ($1.87 billion then) across flagship Adani Enterprises ($660 million), Adani Ports ($640 million), Adani Transmission ($230 million) and Adani Green Energy ($340 million).
Jain did not comment on whether GQG made the subsequent purchase from the open market.
“Within five years, we would like to be one of the largest investors in Adani Group, depending on the valuation, after the family," he told Bloomberg in a recent interview.
Adani group shares have rallied in the past couple of months, and the value of GQG’s Adani holdings—excluding the subsequent purchase—has risen by 58% to ₹24,414.59 crore ($2.95 billion) in a little under three months, led by Adani Enterprises and Adani Green.
A mutual fund manager said on the condition of anonymity that the group’s fundraising efforts might get a boost from further investments by the likes of GQG after a Supreme Court-appointed panel found no prima facie evidence of price manipulation in Adani group shares as alleged by US short-seller Hindenburg Research.
The boards of Adani Enterprises and Adani Transmission have passed resolutions to raise up to ₹12,500 crore and ₹8,500 crore, respectively, via qualified institutional placements (QIPs). Last week, Mint reported that Adani Green plans to raise $500 million-$700 million via a separate QIP.
In January, Adani Enterprises launched a follow-on public offer (FPO) to raise ₹20,000 crore by selling shares. The FPO was scrapped on 1 February due to extreme volatility in the stock after a 24 January report by Hindenburg Research alleged the group was “pulling the largest con in corporate history".
The funds from GQG Partners received by the group in March and the money from the planned QIPs may prove to be crucial for the group to clear its debts as well. A person close to the group said that a portion of all ongoing fundraising would be used for “general corporate purposes", including debt repayments.
Apart from plans to invest in the group’s new businesses, ₹4,500 crore- ₹5,000 crore out of the proposed QIP proceeds are likely to be used to pay out the creditors to get promoter pledges of shares released in some of the group firms, primarily with an aim to calm investors and stay clear of any potential allegations of being over-leveraged.
Currently, the approximate promoters’ share pledge in various Adani companies is Adani Enterprises (0.44%), Adani Ports and SEZ (2.84%), Adani Power (18.85%), Adani Transmission (2.69%), and Adani Green Energy (2%).
To settle investor concerns about the group’s leverage levels and soothe investors’ nerves, the group has paid at least $3 billion to lenders in the March quarter to release a chunk of pledged promoter shares.
In March, Adani group completed full pre-payment of margin-linked share-backed loans worth $2.15 billion. Additionally, the promoters of the group prepaid another $500 million loan facility that was taken for financing the acquisition of Ambuja Cements Ltd. The group’s total debt, however, still stands at a little over $23 billion.
