SYDNEY/BENGALURU, March 3 (Reuters) – 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 financing, while the conglomerate lined up more roadshows to strengthen investor confidence.
The purchases by the US boutique investment firm marked the first major investment in billionaire Gautam Adani’s conglomerate since a short seller’s critical report resulted in seven of the Indian group’s listed firms losing more than $130 billion in market value.
In its January 24 report, US-based Hindenburg Research noted high debt and alleged inappropriate use of offshore tax havens and stock manipulation – which Adani denied. A plunge in Adani shares then prompted the group to shelve a $2.5 billion share sale.
GQG’s deal “may allay concerns about the group’s ability to raise funding for repayment of loans against its listed shares,” analysts at Kotak Institutional Equities said.
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Adani will hold interest rate shows this month in London, Dubai and several US cities, a document seen by Reuters showed, as the conglomerate tries to boost investor confidence.
The meetings are scheduled for Dubai on March 7, London on March 8 and several US locations between March 9 and 15, the document showed.
Adani did not immediately respond to Reuters’ request for comment.
Earlier this week, sources said Adani has told creditors it has secured a $3 billion loan from a sovereign wealth fund. On Thursday, India’s top court asked market regulator SEBI to investigate the group for any lapses related to public equity norms or regulatory disclosures.
Overall, the Adani Group’s net debt stood at $24.1 billion as of September 2022.
“Yesterday’s share buying was a good market booster 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 firms 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 company Adani Enterprises rose as much as 14.4%, while Adani Ports rose 9.7%. Adani Green Energy and Adani Transmission jumped 5% each.
GQG’s Sydney-listed shares ended Friday down 3% against a 0.4% gain in the benchmark share index (.AXJO).
GQG chairman and chief investment officer Rajiv Jain told Reuters the Florida-based firm had conducted its own “deep dive” into Adani and disagreed with Hindenburg’s report.
“Based on previous comments from Rajiv Jain, he’s the type of investor who goes for wherever there’s unrealized value,” said Morningstar analyst Shaun Ler, who covers GQG Partners.
“He is not explicitly running an ESG fund and more importantly his investors are well aware of that,” he said, referring to GQG’s acquisition of Adani, which has large coal assets and therefore will not fall under environmental, social and governance system. 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% so far this year, in line with the benchmark.
Jain is the founder, chairman and chief investment officer of GQG. He also serves as portfolio manager for all of the strategies, according to his profile on GQG’s website.
GQG listed on the Australian Stock Exchange in October 2021, raising A$1.18 billion ($794.97 million), making it Australia’s largest listing of 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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