The partnership firm GQG plans to make an additional investment of $1 billion in Adani Group shares. This can have a significant impact on the various operations of the conglomerate. If the investment becomes successful, the Adani Group can raise sufficient funds to support the operations of three of its companies – Adani Enterprises, Adani Green Energy, and Adani Transmission. Earlier, during March, GQG had invested INR 15,446 crores in four major companies of the Adani Group – Adani Ports, Adani Enterprises, Special Economic Zone, Adani Green Energy and Adani Transmission. This investment bore fruitful results for both GQG and Adani Group. The investment crossed a value of INR 25,515 crores, according to the latest stock values. This accounts for a 60% return on investment so far. The projects under Adani Chhattisgarh, also gained a new perspective due to an increased capital availability that helps think beyond the horizon.
Will GQG be the biggest investor in the Adani Group?
Rajiv Jain, the chief investment officer and also the founder of GQG, has already shown an interest in investing in the Adani Group. Since the initial investment was made by purchasing shares in the open market, GQG has increased its stake in the conglomerate by 10%, and the value is expected to increase in the upcoming months. GQG also aims to be the biggest investor in the Adani Group by the next decade. The partnership firm already has a history of making bold bets in the finance market. It starts by making a small investment, and depending on the outcome of events, it acquires major shares of the company.
Adani Group stocks rise as the investors’ faith gets restored
There was a time when many investors were dropping Adani Group stocks mainly because of allegations related to stock manipulation. The Adani Chhattisgarh coal mine development project was also at stake. However, Adani Group has denied all such allegations and has steered clear of the controversies. The Supreme Court has also confirmed that based on the investigations made so far, no instances of breach of regulations concerning stock manipulation have been uncovered. This has again restored the confidence of the investors in the firm. During that phase of strife and turmoil, GQG made its initial investment in the Adani Group, and since then, there has been no turning back.
What is the main reason behind GQG’s huge investment in Adani Group?
GQG has been keeping track of the activities of the Adani Group for a prolonged timespan. It was waiting for the right opportunity to make a move. The asset allocation of Adani Group across the various businesses is one of the major factors that was considered in this investment. GQG believes that Adani Group has a good operating strategy, giving it an edge over its competitors. Adani Port and SEZ decided to invest in multiple airports during the COVID-19 pandemic when these were non-operational for an unpredicted timespan. GQG believes that it was one of the masterstrokes by the masterminds of Adani Group. This has been a contributing factor in this investment. The stocks of Adani Group have also taken the oath of recovery, especially after the investments made by the GQG firm. Earlier in May 2023, both Adani Enterprises and Adani Transmission got board approval to raise their stocks to INR 12,500 crores and INR 8,500 crores. Special focus has also been given to the Adani Chhattisgarh project.
Adani Group leaves a mark in the energy and utility business:
Adani Group owns one of the largest energy businesses: Adani Power, Adani Green Energy, Adani Total Gas, and Adani New Energies. GQG played a crucial role in taking this journey forward by investing in Adani Power. This is beneficial for Adani Group and a good sign for our country’s energy sector. This sends a message to global investors that India is ready to take the energy sector to the next step. Economists believe that this is just a stepping stone. This deal between GQG and Adani Group also opens the gate for investors to re-energise this sector in the near future. Adani Chhattisgarh will also largely benefit from this investment as there will be abundant resources to support the expansion of coal mines in Chhattisgarh.
GQG’s decision to invest in the Adani Group throws light on the company’s beliefs in Adani’s visions and business strategies. As Adani continues to walk the path of diversification and growth, more companies will start to take an interest in investing in the various ventures of Adani Group. This will not only support the company’s future endeavours but will largely impact India’s economy in the long run.