Adani Shares Surge After $1.87 Billion GQG Investment; more roadshows are planned

SYDNEY/BENGALURU, March 3 (Reuters) – Adani shares rose Friday after a $1.87 billion investment in the group by GQG Partners Inc allayed concerns about the group’s ability to raise funding as the conglomerate plans more roadshows organized to boost investor confidence .

The stock purchases by the US investment firm were the first major investment in billionaire Gautam Adani’s conglomerate since a short-seller’s critical report led to seven of the Indian group’s publicly traded companies losing more than $130 billion in market value.

In its Jan. 24 report, US-based Hindenburg Research found high levels of debt and alleged misuse of offshore tax havens and stock manipulation – which Adani denied. A plunge in Adani stock prompted the group to suspend a $2.5 billion share sale.

GQG’s deal “could allay concerns about the group’s ability to raise financing to repay loans against the publicly traded company’s stock,” Kotak Institutional Equities analysts said.

Latest updates

View 2 more stories

Adani will hold fixed income roadshows this month in London, Dubai and several cities across the United States, according to a document accessed by Reuters, as the conglomerate seeks to boost investor confidence.

The meetings are scheduled for Dubai on March 7, London on March 8 and various locations in the US between March 9 and 15, the document showed.

Adani did not immediately respond to Reuters’ request for comment.

Earlier this week, sources said Adani told creditors it was awarded a $3 billion loan from a sovereign wealth fund. On Thursday, India’s highest court asked market regulator SEBI to investigate the group for any shortcomings related to public shareholding standards or regulatory disclosure.

In total, the net debt of the Adani group firms as of September 2022 was $24.1 billion.


“Yesterday’s share purchase was a good market boost for Adani Group shares, which have endured a long period of underperformance and widespread selling,” said Avinash Gorakshakar, head of research at Profitmart Securities.

Adani firms said on Thursday that GQG bought 3.4% of Adani Enterprises Ltd (ADEL.NS) for about $662 million, 4.1% of Adani Ports and Special Economic Zone Ltd (APSE.NS) for $640 million, 2.5% of Adani Transmission Ltd (ADAI.NS) for $230 million, and 3.5% of Adani Green Energy Ltd (ADNA.NS) for $340 million.

On Friday, shares of flagship Adani Enterprises rose as much as 14.4%, while Adani Ports rose 9.7%. Adani Green Energy and Adani Transmission each rose 5%.

GQG’s Sydney-listed shares ended Friday down 3% against a 0.4% rise in the benchmark share price index (.AXJO).

GQG Chairman and Chief Investment Officer Rajiv Jain told Reuters the Florida-based company had done its own “deep dive” into Adani and disagreed with Hindenburg’s report.

“Based on Rajiv Jain’s previous comments, he’s the type of investor who goes wherever there’s unrealized value,” said Morningstar analyst Shaun Ler, reporting for GQG Partners.

“He does not explicitly manage an ESG fund, and more importantly, his investors are well aware of that,” he said, referring to GQG’s purchase of Adani, which has large coal assets and thus does not fall under the environmental, social and governance guidelines. banner.

“There will be people who will not buy GQG because of Rajiv’s decisions; there will also be people who will want to invest with them given their good performance.”

GQG shares are up 3.58% year-to-date, in line with the benchmark index.

Jain is founder, chairman and chief investment officer at GQG. According to his profile on GQG’s website, he also acts as a portfolio manager for all of his strategies.

GQG listed on the Australian stock exchange in October 2021 and raised A$1.18 billion ($794.97 million), making it Australia’s largest listing of the year. Jain retains a 68.8% stake.

Reporting by Scott Murdoch in Sydney, Nandan Mandayam and Nishit Navin in Bengaluru, Yousef Saba in Dubai; Additional reporting by Praveen Menon; Edited by Christopher Cushing and Kim Coghill

Our Standards: The Thomson Reuters Principles of Trust.

Scott Murdoch

Thomson Reuters

Scott Murdoch has been a journalist for over two decades, working for Thomson Reuters and News Corp in Australia. He has specialized in financial journalism for most of his career, covering equity and debt capital markets in Asia and Australian M&A. He is based in Sydney.


Leave a Reply

Your email address will not be published. Required fields are marked *