US-based investment firm GQG has ploughed $1.9bn into four Adani group companies, giving a boost to infrastructure tycoon Gautam Adani after his conglomerate was hit by a short seller attack five weeks ago.
GQG Partners, which was founded by Rajiv Jain in 2016 and is listed in Australia, bought $1.87bn of Adani stock in secondary market trades, Adani said on Thursday.
Shares in the group’s companies had nosedived following a report by New York-based short seller Hindenburg Research alleging accounting fraud and stock manipulation by the group. Adani has denied the accusations but the ensuing stock market rout wiped $145bn from the group’s collective market value.
“What is not being appreciated is that these are assets run by very competent management,” Jain told the Financial Times. “The execution capabilities are fantastic.”
The asset manager bought shares worth $660mn in the group’s flagship company Adani Enterprises; $640mn in Adani Ports and Special Economic Zone; $230mn in electricity unit Adani Transmission; and $340mn in renewables business Adani Green Energy.
Jain, who spent more than two decades at Swiss group Vontobel Asset Management before starting his own firm, shrugged off allegations made by Hindenburg.
“That’s what makes a market, people have their opinions. We fact checked everything and we felt the market was mispricing Adani,” he said.
GQG had a total of $92bn under management in January this year.
Adani Group’s chief financial officer Jugeshinder “Robbie” Singh said the transaction made GQG a “strategic investor”.
Analysts have said Adani was looking for a credible investor to help stem the share price rout, and the group will hope that GQG’s backing will help win around investors. Adani has also promised that he will straighten out governance in the privately held businesses within his empire. This week, the group told bondholders it had secured a $3bn credit line from investors including a sovereign wealth fund, according people who attended the meetings.
The group’s other prominent foreign backers include French energy major TotalEnergies, which has partnered with Adani in a listed gas company. The French group said it was putting its major hydrogen projects with Adani on hold following the Hindenburg report.
Abu Dhabi conglomerate International Holding Companies invested $2bn across three Adani companies last year, and Qatar’s sovereign wealth fund, owns a 25 per cent stake in Adani’s Mumbai electricity business.
Jain said his firm had been looking at Adani for more than five years and conceded that its shares were at times overpriced, although he said this was the case for many technology stocks. He added GQG had done extensive due diligence on the sprawling conglomerate and it was taking a long-term view.
“This has been a very deep dive in a lot of different areas,” he said. “Could we still be wrong? Yes, of course.”