Adani's foreign backer GQG reviews $5 billion bet after US indictment

MUMBAI: GQG Partners, the first foreign investor to take a contrarian bet on Adani Group companies after Hindenburg Research's accounting scandal report on the ports-to-power conglomerate in 2023, is now reviewing its portfolio following the US bribery charges against founder Gautam Adani.

The US-based fund holds investments worth Rs 42,100 crore ($5 billion) in Adani Group companies. GQG's depository receipts, listed in Sydney, declined over 20% on Thursday after the news broke.

In a statement to the Australian Securities Exchange, GQG - which was founded by India-born Rajiv Jain and Tim Carver in June 2016 - said it is monitoring developments regarding the US prosecutors' allegations against Gautam Adani, his nephew Sagar Adani, and certain Adani Group companies. The fund is also evaluating whether these developments warrant any adjustments to its investment positions in the Adani conglomerate.

"Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate," GQG said. It added that it makes diversified investments and in aggregate, "over 90% of our clients' assets are invested in issuers unrelated to the Adani Group".

As of Sept 30, GQG held stakes ranging from 2% to 5% in six Adani Group companies. It owns 2.1% in Ambuja Cements, 3.5% in Adani Enterprises, 4.1% in Adani Ports, 4.2% in Adani Green Energy, 4.7% in Adani Energy Solutions, and 5.1% in Adani Power.

GQG first invested in Adani Group companies in March 2023. At that time, it plowed in Rs 15,446 crore ($1.87 billion) in four Adani Group companies - Adani Enterprises, Adani Ports, Adani Green and Adani Energy Solutions. Since then, its investment has appreciated to $5 billion through market gains and additional investments. During this period, GQG also realised substantial profits by divesting some of its shareholding in Adani Group companies.

GQG has remained a steadfast supporter of Adani Group since the Hindenburg allegations of a "corporate con", which the conglomerate denied. When Adani Group shares lost over $150 billion in value, GQG invested contrary to market sentiment. Their confidence was rewarded as the shares recovered subsequently. In Oct, GQG further invested in Adani Group flagship Adani Enterprises during its $500 million (Rs 4,200 crore) institutional share sale.


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