Jain’s GQG boosts Adani investments
2 min read 28 Jun 2023, 11:59 PM ISTThe promoters have sold stakes to the Jain-led fund for the second time since US short-seller Hindenburg Research accused Adani Group of manipulating stocks and accounting fraud
PremiumMUMBAI : Rajiv Jain’s GQG Partners Llc acquired an additional $1 billion worth of shares in Adani group companies from the promoter group, boosting the US-based fund’s total investment in the Indian conglomerate to $3.4 billion.
The promoters have sold stakes to the Jain-led fund for the second time since US short-seller Hindenburg Research accused Adani Group of manipulating stocks and accounting fraud. The Adani Group has denied the allegations. India’s markets regulator is expected to complete a probe into the Hindenburg allegations by 14 August.
The investment firm, which already holds stakes in four group companies, acquired an additional 18 million shares or 1.58% of Adani Enterprises Ltd from the SB Adani Family Trust for ₹4,140 crore. The shares were acquired at ₹2,300 apiece.
It also acquired 46 million more shares of Adani Green Energy, representing a 2.9% stake, worth ₹4,232 crore. The acquisition was at ₹920 apiece.
The deals, done through transactions on National Stock Exchange (NSE) of India Ltd, have diluted the promoter holding in group flagship Adani Enterprises and Adani Green by the same extent.
The new investment from GQG Partners resulted in a sharp rally in Adani Enterprises, which gained 5.15% to ₹2,402. However, Adani Green ended flat at ₹956.65. The buying fuelled a rally in Adani Ports and Adani Transmission, stocks that GQG had first invested in on 3 March.
The rally in Nifty constituents Adani Enterprises, Adani Ports, and Adani Transmission added ₹29,424 crore to investor wealth in 10 group companies, raising their combined market cap to ₹10.26 trillion. This was the steepest single-day increase in market value since 23 May. “Renewed interest from the same buyer underscores the confidence in the group’s financials and disclosure standards," said U.R. Bhat, the co-founder and director of Alphaniti Fintech Pvt. Ltd. “While the valuations of the cement and port businesses are comparable with industry benchmarks, those of the other businesses aren’t, which makes investor comfort subjective."
GQG’s Jain told Mint earlier that he was very bullish on the group’s business prospects. “We are very bullish on the group as it is playing a very important role in infra buildout for India. We want to be strategic partners in helping India build world-class infrastructure."
GQG Partners first invested in the group on 3 March, when it purchased ₹15,446 crore ($1.87 billion) worth of stake in Adani Enterprises ( ₹5,460 crore), Adani Ports ( ₹5,282 crore), Adani Transmission ( ₹1,898 crore), and Adani Green Energy ( ₹2,806 crore). Subsequently, Jain told Mint that his firm had purchased another $330-530 million from the open market.
After the purchase in March, GQG held a 3.39% stake in Adani Enterprises, 4.1% in Adani Ports, 2.5% in Adani Transmission, and 3.51% in Adani Green. Following Wednesday’s fresh purchase through the blocks, its stake in Adani Enterprises will increase to 4.97%, while that in Adani Green will rise to 6.4%.
Adani group shares have rallied in the past couple of months, and the value of GQG’s Adani holdings—excluding the subsequent purchase on the open market—has risen by 53% to ₹23,643 crore ($2.9 billion) in three months, led by Adani Enterprises and Adani Ports. “Our overall shareholding (number of shares we own) in all companies is higher than 3 March," Jain said in an e-mail interview earlier, adding that the firm owned the (shares) in multiple accounts.
Adani Enterprises and Adani Transmission recently received the shareholders’ nod to raise s much as ₹12,500 crore and ₹8,500 crore, respectively, via qualified institutional placements.
mayur.bhalerao@livemint.com
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
