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Adani Group shares soar after GQG Partners invests $1.88 billion




Adani Group shares soar after GQG Partners invests $1.88 billion

GQG Partners bought shares in the group for $1.88 billion. (file)


Four firms under the beleaguered Adani group today saw their share prices rise after global investor GQG Partners Inc bought a stake for $1.87 billion, allaying concerns about Adani’s ability to attract funding.

The stake purchase included billionaire Gautam Adani’s first major investment in the group after a critical report by a short-seller resulted in the Indian conglomerate’s seven listed firms losing more than $130 billion in market value.

In a January 24 report, US-based Hindenburg Research noted high debt and alleged improper use of offshore tax havens and stock manipulation – which Adani denied. A dive in Adani shares prompted the group to halt a $2.5 billion share sale.

The GQG deal “could allay concerns about the group’s ability to raise funds to repay debt against its listed company shares,” said analysts at Kotak Institutional Equities.

Overall, the net debt of Adani group firms totaled $24.1 billion as of September 2022. Since the report, the group has sought to reassure investors by holding road shows and calls with bondholders.

“Yesterday’s stake buying was a good market booster for Adani Group shares, which have seen a prolonged period of poor performance and widespread selling,” said Avinash Gorakshkar, head of research at Profitmart Securities.

Adani Firms said on Thursday that GQG has acquired 3.4% of Adani Enterprises Ltd for about $662 million, 4.1% of Adani Ports and Special Economic Zones Ltd for $640 million, 2.5% of Adani Transmission Ltd for $230 million and Adani Green Energy Ltd. bought 3.5%. for $340 million.

Shares of flagship Adani Enterprises rose 11.4% on Friday, while Adani Ports gained 8.1%. Adani Green Energy and Adani Transmission jumped 5% each in intraday trade.

Sydney-listed shares of GQG ended down 3% on Friday against a 0.4% rise in the benchmark Share Price Index.

Rajeev Jain, GQG’s president and chief investment officer, told Reuters the Florida-based firm had done its “deep dive” into Adani and disagreed with the Hindenburg report.

“Based on Rajeev Jain’s past comments, he’s the type of investor who goes for unrealized value,” said Shawn Leer, analyst at Morningstar who covers GQG Partners.

“They obviously do not run an ESG fund, and importantly their investors are well aware of that,” he said in reference to GQG’s buy into Adani, which has major coal assets and is therefore Environment, Social and Governance will not come under the banner. ,

“There will be people who avoid buying GQG because of Rajeev’s decisions; there will be people who want to invest with him because of his good performance.”

GQG stock is up 3.58% so far this year, in line with the benchmark.

Rajeev Jain is the Founder, President and Chief Investment Officer of GQG. He also serves as the portfolio manager for all of its strategies, shown his profile on GQG’s website.

GQG listed on the Stock Exchange of Australia in October 2021, raising A$1.18 billion ($794.97 million), making it Australia’s biggest listing for the year. Jain holds 68.8% stake.

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)

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