SYDNEY/BANGALORE, March 3 (Reuters) – Adani shares rose on Friday after it invested $1.87 billion in GQG Partners Inc Group.
The US boutique investment firm’s purchase of shares, the first major investment in billionaire Gautam Adani’s conglomerate, saw the Indian conglomerate’s seven listed companies lose more than $130 billion in market value as a result of the short seller’s critical report.
Jan. 24 In the report, US-based Hindenburg Research cited high debt and alleged improper use of offshore tax havens and stock manipulation – which Adani denied. A plunge in Adani shares later prompted the group to halt a $2.5 billion stake sale.
GQG’s deal “may confirm concerns about the group’s ability to raise funds to repay debts against the listed company’s shares,” analysts at Kodak Co. said.
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The document, seen by Reuters, said Adani would hold fixed-income roadshows in London, Dubai and several US cities this month, trying to boost investor confidence.
Meetings are scheduled for March 7 in Dubai, March 8 in London and March 9 to 15 in several locations in the United States, the document shows.
Adani did not immediately respond to Reuters’ request for comment.
Earlier this week, Adani informed creditors that it had secured a $3 billion loan from the sovereign wealth fund, sources said. On Thursday, India’s Supreme Court asked market regulator SEBI to probe the board for any lapses in public shareholder norms or regulatory disclosures.
Overall, Adani Group companies’ net debt as of September 2022 was $24.1 billion.
“Yesterday’s share buying was a good market boost for Adani Group stocks, which saw long-term outperformance and widespread selling,” said Avinash Gorakshakar, head of research at Profitmart Securities.
GQG bought a 3.4% stake in Adani Enterprises Ltd ( ADEL.NS ) for $662 million, a 4.1% stake in Adani Ports and Special Economic Zone ( APSE.NS ) for $640 million and a 2.5% stake in Adani Transmission Ltd, Adani Companies said on Thursday. ( ADAI.NS ) for $230 million and 3.5% in Adani Green Energy Ltd ( ADNA.NS ) for $340 million.
On Friday, Adani Enterprises shares rose as much as 14.4%, while Adani Ports gained 9.7%. Adani Green Energy and Adani Transmission rose 5% each.
GQG’s Sydney-listed shares fell 3% on Friday, while the benchmark share price index (.AXJO) rose 0.4%.
GQG chairman and chief investment officer Rajiv Jain told Reuters the Florida-based firm had done a “deep dive” of its own for Adani and disagreed with Hindenburg’s statement.
“Based on Rajiv Jain’s past comments, he’s the type of investor who will go into places where there’s unrealistic value,” said Shawn Lehr, a Morningstar analyst with GQG Partners.
“He doesn’t openly run an ESG fund and, importantly, his investors are well aware of that,” he said, referring to GQG’s purchase of Adani, which has large coal assets and therefore does not fall under environmental, social and governance. Banner.
“There will be people who avoid buying GQG because of Rajeev’s results; there will be people who want to invest with them because of their good performance.”
In line with the benchmark index, GQG stock has gained 3.58% so far this year.
Jain is the Founder, Chairman and Chief Investment Officer of GQG. According to his profile on GQG’s website, he also serves as a portfolio manager for all its strategies.
GQG, which listed on the Australian Stock Exchange in October 2021, raised A$1.18 billion ($794.97 million), Australia’s largest listing for the year. Jain holds 68.8% stake.
Reporting by Scott Murdoch in Sydney, Nandan Mandeyam and Nishit Navin in Bangalore, Yusuf Saba in Dubai; Additional reporting by Praveen Menon; Editing by Christopher Cushing and Kim Coghill
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