GQG Partners And Other Investors Buy Stake Worth $1 Billion In Adani Green, Adani Enterprises

GQG Partners, a US-based investment firm, recently made a roughly $1 billion investment in Adani Group stocks, notably Adani Enterprises along with Adani Green Energy, alongside additional investors such as the IHC Group. This investment has been made through block deals and represents GQG Partners’ 3rd round of funding in the business.

GQG Partners had previously invested INR 15,446 crore in four Adani Group companies in March, including Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission, as well as Adani Enterprises.

Rajiv Jain, the company’s founder, announced in May that GQG Partners had increased its interest in the Adani Group by about 10% and announced its desire to take part in any upcoming fundraising efforts by the conglomerate.

As Jain disclosed to the media one week following investing in the Adani Group in March, they usually embark on a position and subsequently, contingent upon the way things proceed and how the returns come across, they are inclined to extend it to full magnitude since they are not yet at full size during this point in time.

In a matter of fifteen trade sessions, GQG Partners’ investment in Adani Green Energy has generated over 100% profits for the Australian asset management firm. Over INR 2,900 crore, approximately 104%, was earned by GQG Partners throughout that time.

Long association between GQG partners and Adani Group

Adani Green Energy Limited (AGEL) was trapped in a 5% upper circuit at around INR 1,031.55 at 2:07 PM amid high volume. A cumulative of 13.4 million shares had been traded on the National Stock Exchange (NSE) as well as Bombay Stock Exchange (BSE) as of the point in time the report was being written, more than double the average trading activity on the stock. On both markets, there were pending purchase requests totaling about 300,000 shares.

By means of bulk deal transactions on the NSE, GQG Partners purchased 55.6 million shares of equity of AGEL on March 2 for a total of INR 2,806 crore at an average cost of INR 504.60 for every share. The amount invested has grown to be worth INR 5,735 crore based on current prices, an increase of 104% or INR 2,930 crore above the purchasing price.

The stock has since increased 135% from its 52-week lowest point of INR 439.35, which it reached on February 28, 2023. Nevertheless, AGEL’s current quote is still 66% behind the company’s unparalleled record high cost of INR 3,048 reached on April 19, 2022.

GQG Partners has made a combined investment of INR 15,446 crore ($1.87 billion) in Adani Enterprises (AEL), Adani Transmission (ATL), as well as Adani Ports and Special Economic Zone (APSEZ), in addition to AGEL. Cumulative stakes in these four firms have been estimated at INR 21,986 crore based on current prices, up 42% or INR 6,539 crore from the acquisition price.

GQG Partners has increased its investment in Atlanta by 70%, while AEL and APSEZ have increased theirs by 31% and 10%, respectively. The biggest private sector transmission as well as distribution network in India, owned and operated by Adani Portfolio firms, which is expected to generate 9% of India’s renewable energy capacity by 2030, manages and owns the country’s major airport and port facilities.

The Adani Portfolio’s AGEL system for renewable energy. With 20.4 GW of locked-in development across operating, under-construction (UC), granted and acquired properties serving investment-grade counterparties, the business features among the biggest renewable portfolios in the entire globe. Additionally, the business creates utility-scale grid-connected solar and wind farm initiatives and owns, runs, as well as sustains them. With an emphasis on reducing carbon emissions, AGEL is assisting India in achieving its sustainability objectives.

India Ratings and Research (Ind-Ra) stated in the rating rationale that a sustained decrease in net leverage, an acceptable likelihood on potential debt collaborations of equity as well as debt financing, timely and effective execution of UC projects, stabilization of resources with sound parameters for operation facilitating revenue from upstreaming at the holdco, and stabilization of assets could all result in an update of the perspective to the status of stable. On March 7, Ind-Ra changed AGEL’s outlook from “Stable” to “Negative,” while maintaining the company’s long-term issuer grading of “IND A+.” To strengthen its financial buffers, the promoters have obtained $1.87 billion through GQG Partners Inc.

The rating agency had stated that it was going to continue to watch the promoters’ capacity to inject additional equity to finance the UC projects as well as towards working capital demands as needed, despite the promoters’ dedication to decrease their leverage and retire their outstanding loans against shares in the company.

In a recent purchase, GQG Partners along with additional investors bought 1.6% of Adani Enterprises as well as 2.2% in Adani Green Energy, totaling roughly INR 1.8 crore shares and around INR 11.4 lakh shares, respectively. Adani Green’s sale had been priced at INR 920 per share, whilst the block deal for Adani Enterprises had been carried out at an amount of INR 2,300 for every share.

It is worth mentioning that GQG Partners saw a nearly Rs 4,500 crore drop in earnings from its Adani investments amid allegations of a US government inquiry into the Adani Group’s claims to its American investors. This probe followed a negative report on the conglomerate by US short seller Hindenburg Research. As a result, Adani Group’s market value fell by INR 55,000 crore, the highest single-day decrease in four months. GQG Partners earlier purchased 38,701,168 Adani Enterprises shares in March for INR 1,410.86 per share, for a total investment of INR 5,460 crore.

In May, the company earned INR 11,474 crore in earnings, representing a 74% rise above its purchase price. Nevertheless, by the conclusion of the month of June, its earnings had dropped to INR 7,014 crore, a 30% drop when compared to the previous month’s total.

Adani Group’s market value surpassed INR 10 lakh crore on the same day of the funding declaration, with numerous Adani Group equities gaining in daily trade. Adani Enterprises’ stock increased 4.65% to INR 2,387.95 for each share.

Despite a recovery in Adani stocks complying with a series of investor-confidence-building strategies implemented by the company in the weeks following the release of the Hindenburg report, the aggregate market value of each of the ten listed companies remains around INR 10 lakh crore – approximately 48% less than in pre-Hindenburg period.

GQG Partners’ growing investments in the Adani Group were prompted by the firm’s belief in the conglomerate’s corporate governance system as well as dedication to complying with the relevant rules and regulations. The Adani Group has stressed its efforts to resolve concerns and has cautioned against unwarranted speculation, demanding that the Securities and Exchange Board of India (SEBI) as well as the Supreme Court finish their investigations and report their conclusions.

The investment firm’s position in the Adani Group has progressively increased, with GQG Partners increasing their holding in Adani Enterprises from 3.39% to 4.96%, worth roughly $1.65 billion (INR 13,600 crore). GQG boosted its interest in Adani Green Energy from 3.50% to 6.32%, estimated valuation at $1.17 billion (INR 9,600 crore). Significant transactions comprised of the SB Adani Family Trust’s selling of 1.8 crore shares, constituting a 1.6% holding in Adani Enterprises, at INR 2,300 per share. In addition, Goldman Sachs GQG Partners International Fund purchased 1.19 crore shares in Adani Green Energy for INR 920.05 each, establishing a 0.75% ownership.

GQG Partners’ overall investment in the Adani Group has been significant, with the business originally financing $1.87 billion in March and later growing its position through open market acquisitions. Rajiv Jain, owner of GQG Partners, is bullish on his investment, anticipating it to increase almost twice in value. According to the most recent report, Adani Enterprises shares concluded 5.1% higher, whereas Adani Green Energy closed 0.69% down, in comparison with the overall advance in the index of the Nifty 50.

The Adani Group did not respond immediately to demands for comment on GQG Partners’ and other investors’ latest investment.