GQG Partners Sets Sights on Increasing Investments in Adani Group

Rajiv Jain, the founder of GQG Partners, recently announced that the fund is likely to increase its investment in the Adani conglomerate. GQG Partners had previously invested nearly $1.9 billion into four Adani companies, which helped consolidate a nascent recovery in Adani group stocks that had been under pressure due to allegations of accounting fraud by US shortseller Hindenburg. Jain made these comments during a call with the press in Sydney, where he also said that the fund generally initiates a position and increases its investment depending on the earnings of the investee company.

Jain noted that GQG Partners had invested in some “unique assets” from a long-term perspective and that the fund typically initiates a position and increases it depending on the performance of the company. Reuters quoted him as saying, “Chances are we’ll probably buy more because we tend to get it to full size depending on how things go and how the earnings come through because we’re not at full size at this point.”

Last week, the promoter family sold stakes in Adani Enterprises (AEL), Adani Ports & Special Economic Zone (APSEZ), Adani Transmission Ltd (ATL), and Adani Green Energy Ltd (AGEL) to GQG Partners, raising Rs 15,446 crore. Jain had come to Australia to meet with investors, including the country’s largest pension funds. According to a spokesperson from GQG, Jain had planned his visit in advance. When questioned about the reaction of his investors to the purchase of Adani stocks, Jain said the response had been more positive than he anticipated. GQG, he said, is known for not following the herd.

In an interview with The Australian Financial Review, Jain said that the drop in the share price of the Adani group had allowed him to buy “fantastic assets” at an attractive price. He disagreed with Hindenburg on the US short seller’s assessment of the financials of the group companies and was not worried about the leverage in the Adani group, as it was modest compared to other utility assets in the US.

Jain’s comments in Australia on raising his exposure to Adani stocks come at a time when the group is holding roadshows in Dubai, London, and the US to boost investor confidence. All Adani group stocks ended positively on Wednesday, with Adani Enterprises Ltd (AEL) closing at a one-month high after the promoters prepaid share-backed loans of Rs 7,374 crore. The AEL share crossed the Rs 2000 mark and settled at Rs 2,039.65 on the BSE, a gain of Rs 56.80 or 2.86 per cent, after hitting an intra-day peak of Rs 2,085.45 the highest in a month.

In conclusion, Rajiv Jain’s announcement that GQG Partners may increase its investment in the Adani conglomerate has garnered attention, as it comes on the heels of the promoter family’s sale of stakes in Adani companies to the fund. Jain’s confidence in the Adani group and his belief in its long-term potential have contributed to the increase in investor confidence, as demonstrated by the recent gains in Adani group stocks.