GQG Partners, a US-based boutique firm that bets on safe, defensive stocks, invested 154.5 billion rupees ($1.87 billion) in the Adani Group, which is trying to recover from a selloff triggered by a short seller report.
(Bloomberg) — GQG Partners, a US-based boutique firm that bets on safe, defensive stocks, invested 154.5 billion rupees ($1.87 billion) in the Adani Group, which is trying to recover from a selloff triggered by a short seller report.
GQG bought shares in four Adani firms at discounts ranging from 4.2%-12.2% to Thursday’s closing price, according to a statement from the Indian conglomerate and exchange filings. Jefferies brokered the deal and an Adani family trust sold the stock.
“Adani companies own and operate some of the largest and most important infrastructure assets throughout India and around the world,” GQG Chairman Rajiv Jain said in the statement. “We believe that the long-term growth prospects for these companies are substantial.”
Born and raised in India, Jain is known as an anti-Cathie Wood investor and has built GQG into a $92 billion powerhouse. His funds include industries with a decidedly 20th-century feel: oil, tobacco, banking. GQG’s foray into billionaire Gautam Adani’s firms will help advance India’s economy and energy infrastructure, including energy transition goals, Jain said.
The transactions, which took place earlier in the day in Mumbai, have contributed to a 35% surge in Adani’s flagship over three sessions as the embattled group also conducted meetings in Singapore and Hong Kong to reassure bondholders.
GQG bought shares of Adani Ports and Special Economic Zone Ltd. — considered the group’s crown jewel — at a 4.2% discount to Thursday’s close, resulting in a 4% stake. It bought Adani Green Energy Ltd. and Adani Transmission Ltd. at a 5.7% discount for stakes of 3.5% and 2.5%, respectively, and flagship Adani Enterprises Ltd. at a 12.2% discount for a 3.3% stake.
The companies are among the 10 companies that make up the ports-to-power empire. Together, the firms have added about $12.2 billion in market value in three sessions to Thursday, trimming to about $144 billion the combined loss since Hindenburg Research’s Jan. 24 report.
“With a large deal such as today’s, it’s possible that a bottom is formed in the stocks for the near term,” said Abhay Agarwal, fund manager at Piper Serica Advisors Pvt. “It also shows the seller was desperate.”
There is now an expectation that the Adani group will announce steps to deleverage and the next level of confidence will come when this process begins, Agarwal added.
The gains in Adani stocks came amid an order from India’s top court for setting up of a six-member panel to probe US short-seller Hindenburg’s allegations of accounting fraud against the conglomerate. It also asked the local markets regulator to investigate any manipulation in the Adani stocks and apprise the court and the expert panel of its findings within two months.
The Adani Group welcomed the order, saying it will “bring finality in a time bound manner.” The Adani Group has repeatedly denied allegations made in Hindenburg’s report.
–With assistance from Malavika Kaur Makol.
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