GQG Partners bites into Hindenburg’s kill

09 Mar 2023

Another US investor has stepped in to take a big bite off the fallen Adani Group stocks after US short seller Hindenburg hammered the Gautam Adani Group companies to their life’s lows with a maligning report – in what is seen as a planned raid on one of the world’s major infrastructure groups.

Australia listed GQG Partners has bought $1.87 billion (Rs15,446 crore) of Adani Group stocks in secondary market trades across four of its companies, giving a boost to shares of the group.

The key transactions include:

Investment of Rs5,460 crore in Adani Enterprises for 3,87,01,168 equity shares at a final price of Rs1,410.86.
Investment of Rs5,282 crore in Adani Ports for 8,86,00,000 equity shares at a final price of Rs596.20.
Investment of Rs1,898 crore in Adani Transmission for 2,84,00,000 equity shares at a final price of Rs668.40.
Investment of Rs2,806 crore in Adani Green Energy for 5,56,00,000 equity shares at a final price of Rs504.60.

Group flagship Adani Enterprises, soared nearly 17 per cent following the announcement. Shares of Adani Ports rose almost 10 per cent, while Adani Green Energy and Adani Transmission both gained 5 per cent.

The Adani Group that lost as much as $110 billion of its market value in the days after the 24 January Hindenburg report that alleged fraud and stock manipulation, has been reclaiming some of its lost strength with every move the group has taken after the stock market rout.

The Hindenburg report, which accused the infrastructure giant of “the largest con in corporate history,” spooked some of the company’s biggest investors, leading Adani to abandon a $2.5 billion share sale last month.

Adani has denied the allegations of overleveraging, calling them “baseless and discredited,” claiming that it is fully in control of its finances. In has, in fact, prepaid loans worth $1.1 billion early to calm the market and reassure lenders.

GQG Partners, which manages more than $92 billion in assets, said it does not share stock market concerns.

Rajiv Jain, chairman and chief investment officer at GQG Partners, said that he believed the long-term growth outlook for Adani’s companies were “substantial.”

“We are pleased to be investing in companies that will help advance India’s economy and energy infrastructure, including their energy transition over the long run,” he added.

Adani Group finance chief Jugeshinder Singh said in a statement that the deal marked “the continued confidence of global investors in the governance, management practices and the growth” of the group’s companies.

The investment has made GQG a key investor in the development and growth of critical Indian infrastructure. Jefferies India acted as the sole broker for the transaction.