GQG Partners Dives into Adani Power: Billion-Dollar Bet Despite Short Seller Storm!

Mumbai : The US-based boutique investment company GQG Partners, together with other investors, purchased an 8.1% interest in Adani Power Ltd for over Rs 9,000 crore (USD 1.1 billion) on Wednesday, despite the fact that the firm had previously invested in billionaire Gautam Adani’s business despite a critical report from a US short seller.

According to market statistics, GQG Partners and other investors purchased 31.2 crore shares of Adani Power in a block sale, making it one of the biggest ever secondary market equity transactions. Since May, GQG has invested in four different ports-to-energy subsidiaries, the latest being Adani Power.

The Adani family, the company’s promoters, sold 31.2 crore, or 8.1% of the business, for an average price of Rs 279.17 a share. According to the stock market, GQG Partners Emerging Markets Equity Fund and Goldman Sachs Trust II-Goldman Sachs GQG Partners Intl Opportunities Fund purchased a combined 15.2 crore shares at a price of Rs 279.15 a share.

The US investment company began investing in the Adani Group in early March, when the group was suffering from damning charges made by short-seller Hindenburg Research, and has since increased its holding in group firms. Previously, GQG had acquired a 5.4% interest in Adani Enterprises, 6.54 % in Adani Green Energy Ltd, and 2.5% in Adani Transmission Ltd.

Adani Power is a major power and energy supplier in India. This deal is the first of its sort in India, bringing together an investor and a promoter group. The investment, according to the sources, not only validates the Group’s dedication to the highest levels of governance, but also demonstrates the inherent strength of Adani Group’s diverse business operations.

As an added bonus, the Group’s unrivalled ability to generate big money consistently across its entire portfolio of firms is shown by the success of this investment initiative. According to a bombshell analysis published by Hindenburg Research in January, the company was engaging in accounting fraud and stock price manipulation, leading to a stock market meltdown that wiped off USD 150 billion in market value.

Adani Group has rejected all charges made by Hindenburg and is planning a recovery strategy that includes redefining its goals, abandoning acquisitions, prepaying debt to address worries about its cash flows and borrowings, and slowing the rate of expenditure on new projects.

For a total of Rs 15,446 crore ($1.87 billion), the promoters sold GQG Partners an interest in their group firms in March. In May, GQG increased its position by buying an additional USD 400-500 million worth of shares. Sales of shares in the Adani family’s three portfolio firms, Adani Enterprises Ltd, Adani Green Energy Ltd, and Adani Transmission Ltd, brought in $1.38 billion (11,330 crore).

In addition, each of the three portfolio firms has gained clearance from the board of directors to conduct a main offering of shares to investors. Adani Enterprises Ltd hopes to collect Rs 12,500 crore through the sale of shares to investors, while Adani Transmission anticipates collecting Rs 8,500 crore.

Adani Green Energy is seeking a funding of Rs 12,300 crore. The money has been put into important Adani group companies that are involved in India’s current energy revolution. Adani Enterprises is incubating green hydrogen projects, and Adani Green Energy is constructing 45 GW of capacity from renewable sources by 2030. The lines to transport this energy are being laid by Adani Transmission.

The Group has a comprehensive energy portfolio that includes renewables, electricity production, transmission, and gas, displaying a thorough understanding of the ever-changing Indian energy market. India is at a crossroads, trying to meet its massive energy needs while also fulfilling its international ecological obligations.

Following the release of the Hindenburg report, Adani Enterprises was compelled to cancel a Rs 20,000 crore Follow-on Public Offering (FPO), which prompted the current share sales. Even though the offer was oversubscribed, the corporation gave back the funds to everyone who had participated. Adani Group would utilise the money it is seeking for debt reduction and to finance growth initiatives.

A major reason for GQG’s stake on Adani, according to the sources, is that the conglomerate has become the biggest and fastest-growing critical infrastructure developer. Adani’s portfolio provides a unique opportunity to invest in India’s expanding infrastructure sector.

Adani Enterprises Ltd, the group’s flagship and incubation company, is working on projects including airports, highways (transport and logistics), data centres, copper, and green hydrogen, all of which have the potential to unleash enormous wealth for investors over the next five to fifteen years.

Its incubator strategy has produced many successful startups, including Adani Transmission, Adani Power, and Adani Ports & SEZ. These four firms have a market valuation of USD 62 billion between them, which is over double that of the incubator. The company’s leadership has recently said that during the next three to four years, the airport and road operations would be listed independently. Adani Green is now India’s leading and fastest-growing renewable energy provider. Green capacity has increased at a CAGR of 33% over the previous five years, far outperforming the industry average of 15% growth. Its renewable energy portfolio is now 20.4 GW in size (8.2 GW operating and another 12.2 GW in development or near construction). It hopes to have a 45 GW portfolio by the year 2030.