Adani Group promoters increase stake in Adani Ports and Adani Enterprises

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Shares of Adani Ports and Adani Enterprises jumped nearly 2% in early trade on September 11, after Gautam Adani-led promoter group raised equity stakes in both the group companies.

The promoter group has increased its stake in flagship Adani Enterprises to 71.93% from 69.87%, according to stock exchange filings. This is the second time in less than a month that the promoters have raised stake in the flagship firm. The promoters had last month boosted position in Adani Enterprises Ltd from 67.65% to 69.87%.

The promoter group has also increased stake in Adani Ports and Special Economic Zone Ltd from 63.06% to 65.23%, the filings showed. Resurgent Trade and Investment Ltd bought almost 1% stake in Adani Ports and Special Economic Zone Ltd in open market transactions and another 1.2% was purchased by Emerging Market Investment DMCC. Both are promoter group firms.

The stake increase comes within weeks of the US-based boutique investment firm GQG Partners buying shares in Adani group firms. GQG has increased its stake in Adani Ports & Special Economic Zone (APSEZ) to 5.03% last month by way of a bulk deal, stock exchange filings showed.

GQG now has a stake in five of the 10 Adani Group firms. On August 16, it bought a 7.73% stake in Adani Power Ltd. Promoter group firms Worldwide Emerging Market Holding and Afro ASIA Trade And Investments sold an 8.09% stake in Adani Power through block deals on August 16. Of this, GQG bought 7.73%, filings showed.

After the stake sale, promoter holding in Adani Power declined to 66.88% from 74.97%.

The US short-seller Hindenburg Research, in a report released on January 24, alleged accounting fraud, stock price manipulation and improper use of tax havens at the Adani group, triggering a stock market rout that had erased about $150 billion in the market value at its lowest point.

Adani Group has denied all allegations by Hindenburg and is working on a comeback strategy that includes recasting its ambitions, scrapping acquisitions, pre-paying debt to address concerns about its cash flows and borrowings and scaling back its pace of spending on new projects.

GQG has, however, shrugged off the allegations and has since May invested in Adani firms. GQG had previously picked up a 5.4% stake in Adani Enterprises, a 6.54% stake in Adani Green Energy Ltd and a 2.5% stake in Adani Transmission Ltd.

Adani stocks have since recovered some of the losses. GQG has so far invested Rs 38,700 crore in Adani Group firms. Qatar Investment Authority (QIA) has invested Rs 4,100 crore in Adani Green Energy and Bain Capital has poured in Rs 1,440 crore, helping re-build investor confidence.

In addition to stake sale by promoters, the three portfolio companies have received board approvals for primary issuances through a share sale to investors. Adani Enterprises plans to raise Rs 12,500 crore through share sale to investors while Adani Transmission plans to mop up Rs 8,500 crore. Adani Green Energy plans to raise Rs 12,300 crore. Adani Enterprises is incubating the green hydrogen projects while Adani Green Energy is the renewable energy arm that is building 45 GW of capacity by 2030.


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