In a significant move, GQG Partners, a US-based boutique investment firm, along with other investors, has purchased an 8.1% stake in Adani Power Ltd for a substantial sum of over Rs 9,000 crore (USD 1.1 billion). This decision comes despite a damning report from a US short seller and exemplifies the investor’s confidence in billionaire Gautam Adani’s conglomerate.
The investment involved the acquisition of 31.2 crore shares of Adani Power in a single block deal, marking one of the most substantial secondary market equity transactions in history, as confirmed by stock market data.
Notably, this is the fourth company within the Adani Group where GQG has made investments since May. Adani Power, a vital player in India’s energy and power sector, witnessed GQG purchasing a significant stake in its equity.
The Adani family, who were promoters of the firm, offloaded a 31.2 crore (8.1%) stake, selling at an average price of Rs 279.17 per share. The stake was procured by GQG Partners Emerging Markets Equity Fund and Goldman Sachs Trust II-Goldman Sachs GQG Partners Intl Opportunities Fund. Both entities acquired a cumulative total of 15.2 crore shares at Rs 279.15 apiece, according to official stock market data.
GQG Partners initially entered the Adani Group’s investments in early March, during a period of damaging allegations made by short-seller Hindenburg Research. Despite the initial turmoil, GQG has consistently increased its stake in various group companies, having previously acquired positions in Adani Enterprises, Adani Green Energy Ltd, and Adani Transmission Ltd.
This transaction stands as a noteworthy milestone, as it signifies the first instance in India where an investor has engaged directly with a promoter group in such a manner.
The investment is a testament to the inherent strength of the Adani Group’s diversified business ventures, reinforcing its commitment to governance standards. Additionally, this investment underscores the group’s ability to seamlessly raise substantial capital across its diverse portfolio of companies.
Earlier this year, a report from Hindenburg Research had alleged accounting fraud and stock price manipulation within the Adani Group. Despite these allegations, the group has taken proactive measures, including refocusing its ambitions, debt repayment, and adjustments to spending on new projects.
Adani Group’s dynamic portfolio encompasses energy generation, transmission, and gas, reflecting a holistic view of India’s evolving energy landscape as the country navigates its energy demands in line with global sustainability goals.
GQG’s strategic investment in the Adani Group underscores the conglomerate’s status as a vital and rapidly growing infrastructure developer, offering a unique value proposition for investors. The Group’s incubator model has showcased a remarkable track record, including the creation of unicorns such as Adani Transmission, Adani Power, and Adani Ports & SEZ. These successes have led to a combined market capitalization of USD 62 billion, nearly double that of the incubator itself.
Management’s vision for the future involves separate listings for airport and road businesses within the next three to four years, contributing to a comprehensive approach in unlocking value for investors.
Adani Green Energy has emerged as a leading and swiftly growing player in the Indian renewable energy sector, boasting a robust growth rate of 33% CAGR over the past five years, outpacing the industry average of 15%. Presently, their renewable energy portfolio encompasses 20.4 GW, including operational and near-construction projects, with plans to reach a staggering 45 GW by 2030.
Source: PTI
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