SYDNEY/BENGALURU, March 3 (Reuters) – Shares of Adani jumped on Friday after a $1.87 billion investment in the group by GQG Partners Inc eased concerns about the group’s ability to attract investors. financing, while the conglomerate organized other road shows to boost investor confidence.
The US investment firm’s stake purchases marked the first major investment in billionaire Gautam Adani’s conglomerate since a critical report by a short seller caused more than $130 billion in market value to fall to seven listed companies of the Indian group.
In the January 24 report, US-based Hindenburg Research noted high debt and alleged misuse of offshore tax havens and stock manipulation – which Adani denied. A slump in Adani shares later prompted the group to suspend a $2.5 billion share sale.
GQG’s deal “could ease concerns about the group’s ability to raise funds for loan repayments against shares of its listed companies,” analysts at Kotak Institutional Equities said.
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Adani will hold fixed-income road shows in London, Dubai and several U.S. cities this month, according to a document seen by Reuters, as the conglomerate tries to bolster investor confidence.
The meetings are scheduled in Dubai on March 7, in London on March 8 and in several US locations between March 9 and 15, according to the document.
Adani did not immediately respond to Reuters’ request for comment.
Earlier this week, sources said Adani told creditors he had secured a $3 billion loan from a sovereign wealth fund. India’s top court on Thursday asked market regulator SEBI to investigate the group for any breaches related to public shareholding standards or regulatory disclosures.
Overall, the net debt of Adani Group companies stood at $24.1 billion as of September 2022.
“Stake buying yesterday was a good boost for Adani Group shares, which have seen a long period of underperformance and widespread selling,” said Avinash Gorakshakar, head of research at Profitmart Securities.
Adani Enterprises said on Thursday that GQG had bought 3.4% of Adani Enterprises Ltd (ADEL.NS) for about $662 million, 4.1% of Adani Ports and Special Economic Zone Ltd (APSE.NS ) for $640 million, 2.5% of Adani Transmission Ltd. (ADAI.NS) for $230 million and 3.5% of Adani Green Energy Ltd (ADNA.NS) for $340 million.
On Friday, shares of flagship Adani Enterprises rose 14.4%, while Adani Ports jumped 9.7%. Adani Green Energy and Adani Transmission jumped 5% each.
Sydney-listed shares of GQG ended Friday down 3% against a 0.4% rise in the benchmark stock index (.AXJO).
GQG chairman and chief investment officer Rajiv Jain told Reuters the Florida-based company had made its own “deep dive” into Adani and disagreed with Hindenburg’s report.
“Based on Rajiv Jain’s past comments, he’s the type of investor who goes wherever there’s unrealized value,” said Morningstar analyst Shaun Ler, who covers GQG Partners.
“It does not explicitly run an ESG fund, and more importantly, its investors are well aware of that,” he said, referring to GQG’s purchase of Adani, which has significant coal assets and would not fall under therefore no environmental, social and governance responsibility. banner.
“There will be people who avoid buying GQG because of Rajiv’s decisions; there will also be those who want to invest with them given their good performance.”
GQG shares are up 3.58% year-to-date, in line with the benchmark.
Jain is Founder, Chairman and Chief Investment Officer at GQG. He also serves as a portfolio manager for all of his strategies, according to his profile on the GQG website.
GQG entered the Australian Stock Exchange in October 2021, raising A$1.18 billion ($794.97 million), making it Australia’s largest listing for the year. Jain retains a 68.8% stake.
Reporting by Scott Murdoch in Sydney, Nandan Mandayam and Nishit Navin in Bengaluru, Yousef Saba in Dubai; Additional reporting by Praveen Menon; Editing by Christopher Cushing and Kim Coghill
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