SYDNEY/BENGALURU: Adani shares rose on Friday after a $1.87 billion investment in the group by GQG Partners Inc eased concerns about the group’s ability to attract capital, but the group A number of roadshows were issued to boost investor confidence.
The retailer’s purchase marks the first major investment in billionaire Gautam Adani’s conglomerate since the competition report’ But the tycoon resulted in seven Indian group companies losing about $130 billion in market value.
In the report of January 24, US-based Hindenburg Research noted the high level of debt and alleged the unfair use of foreign taxes and the use of goods, which Adani denied.
The plunge in Adani’s stock caused the group to halt a $2.5-billion share sale.
The GQG deal “could allay concerns about the group’s ability to raise funds for repayment of loans against its listed shares,” analysts told Kotak Institutional Equities.
The Adani Group will hold road shows this month in London, Dubai and several cities in the United States, according to a document seen by Reuters.
Meetings are scheduled for Dubai on March 7, London on March 8 and some US locations between March 9-15, the document revealed.
Adani did not immediately respond to Reuters’ request for comment. Earlier this week, two sources with knowledge of the matter said Adani told creditors it had received a $3 billion loan from the sovereign wealth fund.
India’s top court on Thursday asked market regulator SEBI to investigate the sector for any irregularities related to social media reports or regulated information. In total, Adani Group’s corporate debt is $24.1 billion as of September 2022.
“Yesterday’s stake sale is a positive market improvement for Adani Group stocks which have seen a long period of poor performance and general sales,” said Avinash Gorakshakar, the head of research on Profitmart Securities.
Adani companies said on Thursday that GQG bought 3.4% of Adani Enterprises Ltd for about $662 million, 4.1% of Adani Ports and Special Economic Zone Ltd for $640 million, 2.5% of Adani Transmission Ltd for $230 million and 3.5% of Adani Green Energy Ltd. for $340 million.
Shares of flagship Adani Enterprises rose 17.5% on Friday, while Adani Ports rose 10%. Adani Green Energy and Adani Transmission jumped 5% each.
Dollar bonds issued by Adani entities also rose, with Adani Green Energy’s 2024 bond adding 2.3 cents on the dollar to trade at 85.5 cents, while most bonds issued by Adani Ports and Special Economic Zone, Adani Transmission and Adani Electricity Mumbai rose over 1. cent.
GQG shares in Sydney, meanwhile, ended Friday down 3%, compared to a 0.4% rise in the index.
An Indian court has asked the regulator to check Adani’s transactions
GQG Chairman and Chief Investment Officer Rajiv Jain told Reuters that the company had taken its own “deep break” with Adani and agreed with Hindenburg’s report.
However, the sale of the stake raised questions from an investor in Australian pension fund GQG, at a time when large investors, including Norway’s sovereign wealth fund, were selling.
Florida-based GQG manages funds on behalf of at least four Australian pension funds with a total of A$563 billion ($380.36 billion) under the administration.
Cbus Super, which has a $243 million regulated emerging market with GQG, said it is working to get a clearer picture of its exposure to Adani.
“Based on Rajiv Jain’s past performance, he is the type of investor who will go wherever there is an unknown,” said Morningstar analyst Shaun Ler, who including GQG.
“He doesn’t openly manage an ESG fund, and importantly, his investors know it,” he said, referring to GQG’s purchase of Adani, which has large coal assets and is will not fall under the environment, social and management. flags
“There will be people who avoid buying GQG because of Rajiv’s decisions; there will also be those who want to invest in them based on their good performance.” Shares of GQG are up 3.58% so far this year, according to the stock index.
Jain is the founder, chairman and chief investment officer at GQG. He also serves as the portfolio manager for all of his strategies, according to his statement on GQG’s website.
GQG listed on the Australian stock exchange in October 2021, raising A$1.18 billion, making it Australia’s biggest listing of the year. Jain’s stake is 68.8%.