GQG, other foreign investors pour in $1 billion in Adani firms

 US-based boutique investment firm GQG Partners and other foreign investors have bought close to $1 billion of additional stakes in Adani group companies as billionaire Gautam Adani continues to rebuild market confidence since hit by a damning report of a US short seller.

The investors bought 18 million, or 1.6 per cent, from the Adani family in the group’s flagship Adani Enterprises Ltd in a single block trade. In the renewable energy firm Adani Green Energy, a total of 35.2 million shares, or 2.2 per cent, changed hands, sources aware of the matter said. Stock market data showed large block trades in both companies in early Wednesday trading.

The sources said foreign investors have purchased promoter stakes worth $500 million in each of the two companies.

GQG Partners has been ramping up its investment in the conglomerate ever since Hindenburg Research in a bombshell report alleged accounting fraud and stock price manipulation at the Group, triggering a stock market rout that had erased about $150 billion in its market value at its lowest point.

Adani Group has denied all allegations by Hindenburg and is plotting a comeback strategy that includes recasting its ambitions, scrapping acquisitions, pre-paying debt to address concerns about its cash flows and borrowings, and scaling back its pace of spending on new projects. In March, promoters sold stakes worth Rs 15,446 crore ($1.87 billion) in four group companies to GQG Partners. GQG ramped up that investment with an additional purchase of shares worth $400-500 million in May.

GQG investments anchored the Adani group’s recovery from the losses sparked by Hindenburg, though all 10 companies are still trading below the levels before the January 24 report.

The sources said the block trade in Adani Enterprises was transacted at Rs 2,300, a premium to its closing price of Rs 2,281.75 on the BSE on Tuesday. For Adani Green, the trades were priced at Rs 920 to Rs 924.75, a discount to Tuesday’s closing price of Rs 959.90.

On Wednesday, Adani Enterprises closed 5.3 per cent higher at Rs 2,403.65 but Adani Green fell as much as 6.8 per cent before erasing most of its losses to trade 0.16 per cent lower at Rs 958.40. Of the $1.87 billion that GQG first invested on March 2, $1 billion was in Adani Enterprises ($640 million) and Adani Green Energy Ltd ($330 million). Later, it also did some open market purchase in the group companies in the following months.