US boutique investment firm GQG Partners has bought shares worth $1.87 billion in four Adani group companies, marking the first major investment in the Indian conglomerate since a short-seller’s critical report sparked a stock rout.
The group’s seven listed companies have lost some $135 billion in market value since Jan. 24, when Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation—allegations the billionaire Gautam Adani-led group has denied but led it to call off a $2.5 billion share sale.
U.S-based, Australia-listed GQG has, through block deals, bought shares worth 154.46 billion rupees in three Adani group companies, including the conglomerate’s flagship firm Adani Enterprises
It also bought shares in Adani Ports
“We believe that the long-term growth prospects for these companies are substantial,” said Rajiv Jain, GQC’s chairman and chief investment officer.
The investment comes as Adani has sought to calm investors, including by holding a fixed-income roadshow in Singapore and Hong Kong. The group, sources have said, has told creditors it has secured a $3 billion loan from a sovereign wealth fund.
“This (GQC) transaction marks the continued confidence of global investors in the governance, management practices and the growth of Adani Portfolio of companies,” said Adani Group CFO Jugeshinder Singh.
A Goldman Sachs fund has also bought shares worth $138 million in Adani Green, $280 million of shares in Adani Ports, and $67 million of shares in Adani Transmission, stock exchange data showed on Thursday.
“For the short-term, this will definitely be a big positive for the sentiment for Adani stocks given a chunk of shares being bought by big investors,” said Avinash Gorakshakar, head of research at Profitmart Securities.
“But in the longer term market is going to look at how growth is going to come.”
Gorakshakar says the market will also watch for the results of an investigation by India’s market regulator for any lapses by the group related to public shareholding norms or regulatory disclosures.
“Adani stocks are not completely out of the woods, there is a lot more water to cover, so investors will now watch with some amount of caution,” he said. Jefferies India was the sole broker for GQC’s transaction.