US-based boutique investment firm GQG Partners has raised its stake in Adani Ports & Special Economic Zone (APSEZ) to over 5 per cent as it continues to bet on billionaire Gautam Adani’s group shrugging off market concerns.
The Fort Lauderdale, Florida-based GQG increased its stake in APSEZ from 4.93 per cent to 5.03 per cent by way of bulk deal, stock exchange filings showed. GQG now has a stake in five of the 10 Adani Group firms. It on August 16 bought 7.73 per cent stake in Adani Power Ltd.
Promoter group firms Worldwide Emerging Market Holding and Afro ASIA Trade And Investments sold 8.09 per cent stake in Adani Power through block deals on August 16. Of this, GQG bought 7.73 per cent, filings showed. After the stake sale, promoter holding in Adani Power declined to 66.88 per cent from 74.97 per cent.
The investment comes days after Deloitte quit as auditor of APSEZ, renewing investor concerns even as the group slowly recovers from the effects of a report by US short-seller Hindenburg Research. The Hindenburg report released January 24 alleged accounting fraud, stock price manipulation and improper use of tax havens, triggering a stock market rout that had erased about USD 150 billion in the market value at its lowest point. Adani Group has denied all allegations by Hindenburg and is plotting a comeback strategy that includes recasting its ambitions, scrapping acquisitions, pre-paying debt to address concerns about its cash flows and borrowings, and scaling back its pace of spending on new projects.
GQG has however shrugged off the allegations and has since May invested in Adani firms. GQG had previously picked up a 5.4 per cent stake in Adani Enterprises, a 6.54 per cent stake in Adani Green Energy Ltd and a 2.5 per cent stake in Adani Transmission Ltd. Adani stocks have since recovered some of the losses. GQG has so far invested Rs 38,700 crore in Adani Group firms. Qatar Investment Authority (QIA) has invested Rs 4,100 crore in Adani Green Energy and Bain Capital has poured in Rs 1,440 crore, helping re-build investor confidence.
In addition to stake sale by promoters, the three portfolio companies have received board approvals for primary issuances through a share sale to investors. Adani Enterprises plans to raise Rs 12,500 crore through share sale to investors while Adani Transmission plans to mop up Rs 8,500 crore. Adani Green Energy plans to raise Rs 12,300 crore. Adani Enterprises is incubating the green hydrogen projects while Adani Green Energy is the renewable energy arm that is building 45 GW of capacity by 2030. Adani Transmission lays lines to wheel such power. The Group’s 360-degree energy suite encompasses renewables, power generation, transmission and gas, reflecting a well-rounded perspective on India’s dynamic energy landscape.
The share sales come months after Adani Enterprises was forced to abort a Rs 20,000 crore Follow-on Public Offering (FPO) in the wake of the Hindenburg report. The offer was fully subscribed but the company returned the money to subscribers. The funds that Adani Group is raising will be used to pare debt and fund the group’s expansion projects. The group’s flagship and incubator Adani Enterprises Ltd is developing businesses like airports, roads (transport and logistics), data centres, copper and green hydrogen, which could lead to massive value unlocking over the next 5 to 15 years for its investors, they said. Its incubator model has a 100 per cent success rate of creating unicorns and has built unicorns like Adani Transmission, Adani Power and Adani Ports & SEZ. The combined market capitalisation of these four companies alone stands at USD 62 billion — almost twice that of the incubator.
The management, in the recent past, has said that they will be separately listing airports and road businesses in the next three to four years. Adani Green has emerged as the largest and fastest-growing renewable energy player in India. Its green capacities have grown at 33 per cent CAGR over the past five years, outpacing the industry average of 15 per cent. Currently, the size of its renewable energy portfolio stands at 20.4 GW (8.2 GW operational and another 12,2 GW under construction and near construction projects). It is targeting a 45 GW portfolio by 2030.
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