Adani Family Sells Stake In 4 Group Cos

The share sales, involving Adani Ports, Adani Green Energy, Adani Transmission and Adani Enterprises, were done through a series of secondary block transactions, the group said in a statement to the stock exchanges. Earlier on Thursday, Adani Enterprises officially denied news reports from a day earlier of having secured a $3 billion credit line from a sovereign wealth fund. Only a month ago, Adani Enterprises pulled its ₹20,000 crore follow-on public offering, which had a floor price of ₹3,112 apiece, as a fallout from the Hindenburg Research report. GQG’s acquisition price of Adani Enterprises at ₹1,410.86 on Thursday was at a 10% discount to Wednesday’s closing price. Shares of Adani Enterprises rallied 2.75% after the deal, while Adani Ports gained 3.45%, and Adani Green and Adani Transmission rose to hit the 5% upper circuit at closing.

Florida-based GQG Partners, founded by Jain in 2016, picked up 3.39% in Adani Enterprises worth ₹5,460 crore, 4.1% in Adani Ports worth ₹5,282.33 crore, 3.51% stake in Adani Green for ₹2,806 crore and 2.5% stake in Adani Transmission worth ₹1,898 crore from SB Adani Family Trust. The stocks rallied after changing hands in early morning deals. A fund manager described the deal as “a value proposition" for GQG, which holds 1.42% of India’s largest mortgage financier, Housing Development Finance Corp. and 1.29% in FMCG major ITC Ltd at the end of December 2022. He described the deal brokered by Jefferies as a “major coup" which could lend “significant credibility" to the crisis-hit group, thanks to “marquee investment genius Jain at its helm."

“I am excited to have initiated positions in the Adani companies," Jain said. “Adani companies own and operate some of the largest and most important infrastructure assets throughout India and around the world. Gautam Adani is widely regarded as among the best entrepreneurs of his generation. 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." 

The impact of GQG’s purchase was felt on the other six listed stocks, which rose for the second straight session after the Hindenburg Research report of 24 January.

The overall market cap of the group stocks rose by ₹30,226 crore on NSE on Thursday. Since the report’s release on 24 February, shareholder wealth has plunged by three-fifths to ₹7.86 trillion from ₹19.22 trillion.

However, GQG’s purchase of stakes is seen as alleviating concerns for the promoter group and stabilising the group’s share prices.

“The purchase by GQG provides the much-needed liquidity to the family and removes the negative overhang on the stock prices for now at least," said a wealth manager.

Another well-known fund manager who knows GQG founder Rajiv Jain said that the excessive volatility the stocks have been subjected to since the Hindenburg report could abate and that some stability would set in.

Declining to comment on the stocks, Jyotivardhan Jaipuria, managing director of Valentis Advisors, said Jain has a “great track record."

Jain served as CIO of global investment firm Vontobel before he left to form GQG Partners.

“This transaction marks the continued confidence of global investors in the governance, management practices and the growth of Adani Portfolio of companies," said Jugeshinder Singh, group chief financial officer of Adani Group.

Earlier, in a communication to the exchanges, Adani Enterprises said, “We would like to clarify that the news item appears to be a market rumour, and hence it would be inappropriate on our part to comment on it."