Adani Group: GQG Partners and Goldman Sachs Invests $2 Bn

[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text css=”.vc_custom_1677852231846{margin-right: 10px !important;margin-left: 10px !important;}”]After the US-based Hindenburg Research published research alleging market manipulation and accounting fraud by the company, shares of the Adani Group have fallen drastically over the previous month. Since the publication of the report, the company’s listed entities have together lost more than Rs 12 lakh crore. However, the Adani Group has been able to contain the damage by withdrawing its fully subscribed FPO and paying back some parts of the debt before time.

The confidence in the Adani Group seems to be bolstered by the fact that the Adani Group has received investments totaling $2 billion over the past two days from two large FII companies.

Florida-based GQG Partners purchased shares in four of the group’s companies and invested Rs 15,446 crores. As a result, the Adani group experienced significant relief from the disastrous collapse of its companies brought on by the Hindenburg report. In addition, a total of 225,22,850 shares of Adani Green Energy Ltd. were also purchased by Goldman Sachs at a price of 504.5, for a total investment of Rs 1,135 crore Indian rupees.

GQG Partners is only a seven-year-old investment boutique managing a $130 Billion fund. Another name that grabbed the headlines with this deal was that of Rajiv Jain, the founder, and chairman of GQG Partners. This transaction is expected to restore the confidence of other FIIs in the Adani Group.

GQG Partner’s chairman and chief investment officer Rajiv Jain was quoted in the statement as saying that he was excited to have initiated positions in the Adani companies. “Adani companies own and operate some of the largest and most important infrastructure assets throughout India and around the world.”
“We believe that the long-term growth prospects for these companies are substantial, and 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 said. Last week, he had spoken positively about the group in an interview with a television channel.
Rajiv Jain has decades of experience as a portfolio manager. With his expertise, he founded GQG Partners in June 2016. Rajiv believes in the long-term growth prospects of the Gautam Adani-backed conglomerate. His company bought between 2% to 4% stake on Thursday in Adani Group-backed companies. However, the deal with Adani Group didn’t go down well with GQG investors. The company’s Australian-listed shares fell by as much as 3% today.

Commenting on the development, Adani Group’s chief financial officer Jugeshinder Singh said “This transaction marks the continued confidence of global investors in the governance, management practices, and the growth of Adani’s portfolio of companies.”

Selling stakes in some key portfolio companies to these FIIs gives Gautam Adani enough relief in the immediate term to meet some of the debt obligations of his group. Senior officials have been assuring investors that it would be able to pay overseas bonds’ dues as they mature through loans from foreign banks, while a bridge loan taken to buy Holcim’s cement companies in India would be repaid by promoters.

With investments in the Adani Group by two major FIIs, the negative sentiment created around the Group post the Hindenburg Report is getting erased. It is also building confidence in Indian investors about the groups’ capabilities to handle challenges. One should not be surprised to witness a rally in the Adani Group stocks in the coming few weeks on the back of renewed investor confidence in the Group.

 

ABOUT THE AUTHOR

Ketan Sonalkar (SEBI Rgn No INA000011255 )

Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

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