Promoter raises stake in Adani by 2.22%

The Adani Group’s promoter firm has taken steps to increase its ownership stake in the flagship company, Adani Enterprises, as the conglomerate continues its recovery from the impact of a critical report issued by US short-seller Hindenburg Research.

According to an exchange filing on Monday, the promoter firm, Kempas Trade and Investment Ltd, has elevated its ownership from 67.65% to 69.87%. The acquisition of this additional stake, amounting to 2.22%, occurred through open-market transactions spanning from August 7 to August 18.

This development closely follows news from two days ago, which revealed that US-based boutique investment firm GQG Partners had augmented its stake in Adani Ports & Special Economic Zone (APSEZ) to 5.03% through a bulk deal last month. Previously holding a 4.93% stake in Adani Ports, GQG Partners secured an additional 0.10% stake, equivalent to 2.2 million shares, in a bulk transaction documented in a disclosure statement released late on Saturday.

GQG Partners, the first entity to infuse capital into the Adani Group after the publication of Hindenburg Research’s report triggered significant stock value declines, now holds stakes in five out of the Adani Group’s 10 companies.

Recently, GQG acquired a 7.73% stake in Adani Power Ltd. During the same period, the power company’s promoter group firms, Worldwide Emerging Market Holding and Afro ASIA Trade And Investments, executed block deals to sell an 8.09% stake in Adani Power on August 16. Out of this, GQG acquired 7.73%. As a result of this stake sale, the promoter’s holding in Adani Power decreased from 74.97% to 66.88%. This investment comes in the wake of Deloitte’s resignation as the auditor of APSEZ, reigniting investor concerns.

In January, Hindenburg Research accused the Adani Group of engaging in “accounting fraud” and “stock price manipulation.” The short-seller also alleged the use of shell companies for fraudulent activities and the accumulation of significant debts within the conglomerate. The Adani Group refuted these claims and undertook various measures, including canceling acquisition plans and pre-paying debt, to alleviate investor apprehensions regarding the group’s cash flows.

Despite the allegations, GQG Partners has remained steadfast and has continued to invest billions of dollars in Adani firms since May. Prior to these recent developments, GQG had already acquired 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. The total investment by GQG in Adani Group firms currently stands at Rs 38,700 crore.