Adani Enterprises, Adani Ports shares rise 2% as promoter group hikes stake
Shares of Adani Ports and Adani Enterprises experienced a notable uptick of nearly 2 percent in early trading following an announcement that the Gautam Adani-led promoter group had increased its equity stakes in both companies. As of 10:05 am, Adani Ports stock was trading 1.82 percent higher at Rs 840, while Adani Enterprises was trading 2.38 percent higher at Rs 2,579.
The Gautam Adani-led promoter group implemented this stake increase in two of the group’s listed companies. In the case of flagship company Adani Enterprises, the promoter group’s stake has risen from 69.87 percent to 71.93 percent, as indicated by stock exchange filings. This marks the second time in less than a month that the promoters have raised their stake in Adani Enterprises, having previously increased it from 67.65 percent to 69.87 percent in the prior month.
Additionally, the promoter group has elevated its stake in Adani Ports and Special Economic Zone Ltd from 63.06 percent to 65.23 percent, as per the filings. The increase in Adani Ports’ stake involved acquisitions by Resurgent Trade and Investment Ltd, which purchased almost one percent of the stake in open market transactions, and Emerging Market Investment DMCC, which acquired an additional 1.2 percent. Both of these entities are affiliated with the promoter group.
These developments reflect the promoter group’s ongoing commitment to its portfolio of listed companies and their strategic objectives. The increase in their equity stakes signifies their confidence in the long-term prospects and growth potential of these companies.
In the case of Adani Enterprises Ltd, the shares were acquired by Kempas Trade and Investment Ltd and Infinite Trade and Investment Ltd, according to stock exchange filings. These transactions occurred in the open market between August 14 and September 8. The increase in the promoter group’s stake in Adani Enterprises comes shortly after the US-based boutique investment firm GQG Partners made purchases of shares in Adani group companies.
GQG Partners expanded its stake in Adani Ports & Special Economic Zone (APSEZ) to 5.03 percent in the previous month through a bulk deal, as indicated by stock exchange filings. This investment firm now holds stakes in five of the 10 Adani Group companies.
On August 16, GQG Partners acquired a 7.73 percent stake in Adani Power Ltd. Promoter group entities Worldwide Emerging Market Holding and Afro ASIA Trade And Investments executed block deals on August 16, selling an 8.09 percent stake in Adani Power. GQG Partners purchased 7.73 percent of this stake, according to the filings.
Following this stake sale, the promoter holding in Adani Power decreased from 74.97 percent to 66.88 percent. It’s worth noting that earlier in the year, US short-seller Hindenburg Research released a report in which it made allegations of accounting fraud, stock price manipulation, and the improper use of tax havens within the Adani group. This report had a significant impact on the stock market, leading to a sharp decline in the market value of Adani Group companies, erasing approximately $150 billion in market value at its lowest point.
The Adani Group has strongly refuted all allegations made by Hindenburg Research and is actively working on a comeback strategy to address concerns about its financial health and boost investor confidence. This strategy includes reevaluating its ambitions, reconsidering acquisitions, pre-paying debt to manage cash flows and borrowing concerns, and adjusting the pace of spending on new projects.
On the other hand, GQG Partners has disregarded the allegations and continued to invest in Adani group companies since May. GQG’s investments in Adani firms include a 5.4 percent stake in Adani Enterprises, a 6.54 percent stake in Adani Green Energy Ltd, and a 2.5 percent stake in Adani Transmission Ltd.
Adani stocks have shown signs of recovery following the initial market turmoil caused by the Hindenburg Research report. GQG’s investments, along with contributions from other investors such as Qatar Investment Authority (QIA) and Bain Capital, have played a role in rebuilding investor confidence in Adani Group firms. Qatar Investment Authority (QIA) has invested Rs 4,100 crore in Adani Green Energy, while Bain Capital has poured in Rs 1,440 crore.
Furthermore, the three portfolio companies within the Adani Group have received board approvals for primary issuances through share sales to investors. Adani Enterprises plans to raise Rs 12,500 crore through a share sale to investors, Adani Transmission aims to raise Rs 8,500 crore, and Adani Green Energy intends to raise Rs 12,300 crore.
These capital-raising initiatives are part of the group’s efforts to finance and accelerate various projects, including green hydrogen and renewable energy endeavors. Adani Green Energy, in particular, is on a mission to build 45 GW of renewable energy capacity by 2030.
