As a US private equity group decided to invest about $1.9 billion in the troubled conglomerate of Indian billionaire Gautam Adani, shares of some of his companies jumped on Friday.
In secondary market transactions involving four of its subsidiaries, the Adani Group disclosed on Thursday that GQG Partners had purchased $1.87 billion worth of stock.
Following the news, shares of Adani Enterprises, the group’s largest company, increased by around 17%. Adani Green Energy and Adani Transmission both saw a 5% jump in share price while Adani Ports saw a nearly 10% increase.
Gaining a fresh foreign investor will give Adani some much-needed relief. The company lost up to $110 billion of its market value in the days following a report by US short seller Hindenburg Research, which was released on January 24 and alleging stock manipulation and fraud.
The repercussions alarmed some of the company’s largest investors, which prompted Adani to cancel a $2.5 billion share offering last month.
The Hindenburg study, which accused the infrastructure giant of “the greatest scam in business history,” also raised concerns about its enormous debt levels. The charges have been vehemently refuted by Adani, which has called them “baseless and discredited,” and asserted that it is perfectly able to satisfy its loan obligations.
The business said in early February that it will repay loans totaling $1.1 billion early in order to stop the market crash and reassure lenders.
However, GQG Partners, an asset manager with over $92 billion in assets and an Australian stock exchange listing, doesn’t seem to share the worries of other investors.
The chairman and chief investment officer of GQG Partners, Rajiv Jain, stated that he thought the prospects for Adani’s enterprises’ long-term growth were “considerable.”
“We are thrilled to be investing in companies that will support India’s economy and energy infrastructure, particularly their long-term energy shift,” he continued.
In a statement, Jugeshinder Singh, the finance head of the Adani Group, stated that the transaction symbolized “the sustained confidence of global investors in the governance, management processes, and the growth” of the group’s firms.
