Bengaluru/New York: US boutique investment firm GQG Partners Inc has purchased shares worth US$1.87 billion (RM8.37 billion) in four Adani Group companies.
Adani’s seven listed companies have lost around US$135 billion in market value since Jan. 24, when Hindenburg Research accused the company of improper use of offshore tax havens and stock manipulation. The group, led by billionaire Gautam Adani, denied the allegations. It has since canceled a $2.5 billion equity sale.
The investment came on the day India’s Supreme Court requested market regulator SEBI to investigate the group for negligence related to shareholding norms or regulatory disclosures.
The group has tried to reassure investors with roadshows and conference calls with bondholders. Sources said Adani told creditors that he had secured his US$3 billion loan from his sovereign wealth fund.
US-based, Australian-listed GQG has purchased shares in four Adani Group companies, including the conglomerate’s flagship company, Adani Enterprises, for Rs 154.46 billion (RM837 million) through a block transaction. , indicated in regulatory filings. The shares were sold by the Adani Family Trust, using Jeffries as a broker.
Based in Fort Lauderdale, Florida, GQG manages US$88 billion in global, US and emerging market equity funds.
In early Australian trading, shares in GQG Partners fell 2.3% on Friday (March 3) while the S&P/ASX200 rose 0.4%.
Rajiv Jain, Chairman and Chief Investment Officer of GQG, said: Prior to founding GQG, he worked at Vontobel Asset Management for 22 years.
GQG has a 3.4% stake in Adani Enterprises for approximately US$662 million, a 4.1% stake in Adani Ports for US$640 million, a 2.5% stake in Adani Transmission for US$230 million and a 3.5% stake in Adani Green Energy for US$300 million. Acquired for US$40 million. for filing.
Jain said he has been following Adani for six years as an investor in infrastructure companies. “In our view, these assets aren’t going to be low forever,” he told Reuters.
Before investing, Jain said GQG “did a deep dive on our own” as part of its due diligence, including conversations with the group’s vendors, bankers and partners. “I don’t really agree with the (Hindenburg) report,” he said, adding that infrastructure companies are subject to tight regulation and therefore the risk of fraud is low.
Jefferies approached GQG about the deal about five weeks ago when senior executives were in Miami, two sources familiar with the matter said. Jefferies has worked with GQG for years and understands its investment style, one of the sources added.
“This transaction demonstrates global investors’ continued confidence in the company’s governance, management practices and the growth of the Adani portfolio,” said Adani Group CFO Jugeshinder Singh.
Ahead of the announcement, Adani Group’s share price rose, with Adani Enterprises up nearly 35% over the past three sessions, Adani Ports up 11% and Adani Green Energy up 16%. Adani Transmission is up 10% over his two previous sessions.
“In the short term, this will definitely be a big positive for sentiment in Adani stocks,” said Avinash Gorakshakar, head of research at Profitmart Securities.
“But in the long term, we’ll see how the market grows.”
Jefferies India was the sole broker for GQG’s trade. – Reuters
