Markets upbeat on Adani Enterprises after GQG said to have raised stake

Adani Enterprises saw delivery volumes spurt to around 30 lakh shares each over two days through Tuesday, the most since February 9 , on a Bloomberg report of GQG Partners increasing its stake by 10% in the group flagship . Market mavens said this would result in the float of the stock,  which was not cheap, reducing and make it more expensive . One of them added that it would be interesting to see whether LIC books profit in the stock .

Markets seem to have anticipated the move with the stock having risen almost 19% on Monday itself . Rajiv Jain founded GQG Partners purchased stake worth ₹5460 crore in AEL early March . Tuesday’s report pegs it at USD 3.5 bn or ₹28,980 Crore based on a rate of 82.8 /usd.

“The float of the stock will reduces as another big investor picks up stake in the company,” said Rajesh Baheti, director, Crosseas Capital. “Will be interesting to see if LIC books profit in AEL in which it holds a significant stake as the stock at present value isn’t cheap.”

At the end of the March quarter, the promoters held 69.23% in AEL. Of the public holding, FPIs held 17.75 % and LIC was the single-largest domestic institutional holder at 4.26%.

A market source said that despite sitting on “pretty gains”, Jain founded GQG’s further investment into AEL showed that he was in for the “long haul” in the belief of the company’s potential. This, he added, would boost the stock’s prospects, given that regulators had not found any “incriminating” evidence in terms of violation of minimum public shareholding norms which stipulate a 25% floor.

Jain’s GQG Partners purchased the AEL share at ₹1410. At the current price of ₹2633.70 apiece, his firm’s unrealised profit stands at a whopping 87%.   

The news sparked a massive short covering bout in the active futures contract with outstanding positions falling by a whopping 28% as the share price rose by 13.22% to ₹2633.70. The total turnover of the stock at ₹7494 crore was the highest in a year.