Investment firm GQG Partners gains over 36% from Adani group bets

Current value of its investment in the Indian conglomerate stands at Rs 42,017 crore

Contrarian bets by GQG Partners on Adani group shares since March seem to have paid off, as the Australia-listed investment firm has made more than 36 per cent gains on its total investment of Rs 30,755 crore ($3.7 billion) so far. The current value of its investment in the Indian conglomerate stood at Rs 42,017 crore ($5.1 billion) as of Friday, data from the stock exchanges showed.  

The first tranche of investment made by GQG Partners was Rs 15,446 crore, in four Adani group firms – Adani Enterprises, Adani Ports & SEZ, Adani Transmission, and Adani Green Energy. This has yielded 64.4 per cent returns, with the investment rising to Rs 25,388 crore as of Friday.

GQG first acquired 3 per cent, or 38.7 million shares, of Adani Enterprises (AEL) at Rs 1,411 apiece in March for a total of Rs 5,460 crore. On Friday, the AEL stock closed at Rs 2,577. The fund had also acquired a 4.1 per cent stake in Adani Ports for Rs 5,282 crore, and shares in Adani Transmission and Adani Green Energy for Rs 1,898 crore and Rs 2,806 crore, respectively, on the same day.

Later in May, GQG invested an additional $500 million by acquiring shares in Adani group companies from the market. A month later, it increased its exposure to the conglomerate by investing about $1 billion (Rs 8,200 crore) by buying shares in Adani Transmission, Adani Enterprises, and Adani Green Energy from the family trust. GQG made a gain of 8.4 per cent, or Rs 933 crore, on this investment. 
 

The fund invested an additional Rs 9,000 crore to buy an 8.1 per cent stake in Adani Power from the promoters on Wednesday.

Interestingly, three group companies have received the board approval to raise funds by selling shares via the qualified institutional placement route. AEL plans to raise Rs 12,500 crore, and Adani Transmission up to Rs 8,500 crore. Adani Green Energy, which is spearheading the group’s renewable business, plans to raise Rs 12,300 crore.

Early this month, the promoters sold shares worth Rs 3,920 crore in Adani Green Energy. With this, they have sold group firms' shares worth Rs 37,920 crore to investors since the release of a scathing report by American short seller Hindenburg Research, which had resulted in a share crash. After the promoters prepaid their loans from the proceeds of the share sale, the shares have recovered. 

The group’s energy portfolio companies – Adani Power, Adani Green Energy, Adani Total Gas, and Adani New Energies -- currently own the largest and most diversified energy and utility business in India.

Bankers said the GQG investment in Adani Power on Wednesday was a landmark deal that showcases another vertical in the emerging energy transition space in which Adani portfolio companies were playing an important role. “This transaction also highlights the vote of confidence of global investors in India’s new-age and re-energised power sector that is being propelled by the energy transition plan of the Indian government,” said a banker close to the transaction.