Adani hikes stake in two group companies to work on claw back strategy

It has increased stake in flagship Adani Enterprises to 71.93% from 69.87%, while also increasing stake in Adani Ports and Special Economic Zone Ltd from 63.06% to 65.23%, the filings showed

Billionaire Gautam Adani-led promoter group has increased stake in two of the group's listed companies, as the ports-to-energy conglomerate continues to work on a claw back strategy after being hit by damaging reports.

The promoter group has increased stake in flagship Adani Enterprises to 71.93 per cent from 69.87 per cent, according to stock exchange filings.

This is the second time in less than a month that the promoters have raised stake in the flagship firm that incubates new businesses. The promoters had last month increased stake in Adani Enterprises Ltd from 67.65 per cent to 69.87 per cent.

The promoter group has also increased stake in Adani Ports and Special Economic Zone Ltd from 63.06 per cent to 65.23 per cent, the filings showed.

Resurgent Trade and Investment Ltd bought almost one per cent stake in Adani Ports and Special Economic Zone Ltd in open market transactions and another 1.2 per cent was purchased by Emerging Market Investment DMCC. Both are promoter group firms.

In the case of Adani Enterprises Ltd, the shares were bought by Kempas Trade and Investment Ltd and Infinite Trade and Investment Ltd.

The filings said the stakes were bought in open market transactions between August 14 and September 8.

The stake increase comes within weeks of the US-based boutique investment firm GQG Partners buying shares in Adani group firms.

GQG has increased its stake in Adani Ports & Special Economic Zone (APSEZ) to 5.03 per cent last month by way of a bulk deal, stock exchange filings showed.

GQG now has a stake in five of the 10 Adani Group firms.

On August 16, it bought a 7.73 per cent stake in Adani Power Ltd. Promoter group firms Worldwide Emerging Market Holding and Afro ASIA Trade And Investments sold an 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 US short-seller Hindenburg Research, in a report released on January 24, alleged accounting fraud, stock price manipulation and improper use of tax havens at the Adani group, 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 working on 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.