GQG, a US-based investment company, has invested $1.9bn in four Adani Group companies. This is after Gautam Adani ‘s conglomerate was subject to a short sale attack five weeks ago.
GQG Partners was established by Rajiv Jayiv Jain in 2016 and is listed in Australia. It bought Adani stock for $1.87bn in secondary market trades, Adani stated on Thursday.
Following a report from New York-based short-seller Hindenburg Research, which alleges accounting fraud and stock manipulation by the group, shares in the companies of the group had plummeted. Although Adani denied the allegations, the stock market crash that followed wiped out $145bn of the collective market value of the group wiped out $145bn.
Jain stated, “What isn’t being appreciated is the fact that these assets are managed by very competent management.” “The execution capabilities of these assets are amazing.”
The asset manager purchased shares in Adani Enterprises, the group’s flagship business; $640mn Adani Ports & Special Economic Zone; $230mn Adani Transmission; $340mn Adani Green Energy; and $660mn Adani Transmission.
Jain, who worked for more than 20 years at Swiss firm Vontobel Asset Management, before starting his own company, dismissed the allegations of Hindenburg.
“That’s what makes markets, people have their opinions. He said that he had fact-checked everything and felt the market was underpricing Adani.
GQG had $92bn in total under management as of January 2012.
Jugeshinder Singh, Adani Group’s chief finance officer, stated that the transaction made GQG “strategic investors”.
Analysts believe Adani was seeking a credible investor to stem the share price crash. GQG’s support will be a boon for investors. Adani also pledged that he would improve governance within the privately-held businesses of his empire. According to people who attended the meeting, Adani told bondholders that he had obtained a $3bn creditline from investors, including a sovereign wealth fund.
Other prominent foreign backers of the group include TotalEnergies, a French energy company that has partnered Adani in a listed gas firm. Following the Hindenburg report, the French group stated that it would suspend its major hydrogen projects with Adani.
International Holding Companies, Abu Dhabi’s conglomerate, invested $2bn in three Adani companies last fiscal year. Qatar’s sovereign wealth fund also owns a 25% stake in Adani’s Mumbai electricity business.
Jain stated that his company had been following Adani for over five years. He acknowledged that Adani’s shares were sometimes too expensive, but he also said that this is the case with many technology stocks. GQG had conducted extensive research on the conglomerate, and was now taking a long-term perspective.
He said, “This has been an extremely deep dive in many different areas.” Could we be wrong? “Yes, indeed.”