Adani Power gains 3%, recover previous day’s loss after GQG revealed as buyer of 8.1% stake
On August 17, Adani Power’s share price experienced a positive movement of over 3 percent during morning trading. This increase helped to recover the losses that were incurred in the previous day’s trading session. The positive price movement was attributed to the news that GQG Partners had acquired an 8.1 percent equity stake in Adani Power.
Following this development, the stock price of Adani Power surged to a high of Rs 288.3 during the morning trading session. This was a notable improvement compared to the closing price of Rs 279.9 on the previous trading day.
The previous day, which was August 16, Adani Power’s shares had encountered a decline of as much as 4 percent intraday. However, the stock managed to recover a portion of these losses by the end of the trading day, ultimately closing at Rs 279.9. The decline on this day was triggered by reports of an impending sale of an 8.1 percent equity stake in the company.
After the trading day had concluded on August 16, it was revealed that GQG Partners, a firm headed by Rajiv Jain, had indeed purchased the 8.1 percent equity stake in Adani Power. The acquisition was executed for a total amount of about Rs 9,000 crore, which is equivalent to approximately $1.1 billion.
In summary, Adani Power’s share price exhibited positive movement on August 17, rebounding from the losses incurred on the previous day due to the news of GQG Partners’ acquisition of an 8.1 percent equity stake in the company for a substantial sum of money.
At 09.36 am on the stated day, Adani Power’s shares were actively trading on the National Stock Exchange (NSE) at a price of Rs 287.40. This represented a gain of approximately 2.6 percent from the closing price of the previous trading session.
In the month of March, GQG Partners, which is headquartered in the United States, made significant investments in various companies within the Adani Group. This move came after the Adani Group had experienced a substantial decline in market value, primarily triggered by the release of a report from the short-seller Hindenburg Research. The report had led to a decrease of about half in the market value of the Adani Group’s companies.
To counteract the impact of this market value loss, GQG Partners invested a substantial amount of $1.87 billion across multiple companies within the Adani Group. The companies that received investments included Adani Enterprises, Adani Ports, Adani Transmission, and Adani Green Energy.
Following this initial investment, GQG Partners continued to show confidence in the Adani Group’s prospects. In June, they further demonstrated their commitment by injecting an additional $1 billion into various companies within the Adani Group. This ongoing investment was aimed at supporting the group’s endeavors and projects.
In summary, GQG Partners, a US-based fund, made noteworthy investments of $1.87 billion in March across several Adani Group companies after the group’s market value experienced a significant decline due to the Hindenburg Research report. This was followed by another investment of $1 billion in June to reinforce their support for the Adani Group’s businesses.
The Adani Group faced a significant decline in the value of its stocks after a US-based short-seller raised concerns about governance issues. As a result of these concerns being highlighted, Adani Enterprises alone experienced a drastic reduction of about 75 percent in its market capitalization within a span of just one month. This decline was reflective of the market’s response to the uncertainties raised by the short-seller’s report.
The collective impact on the entire group was substantial, with the combined market capitalization of all the Adani Group firms decreasing by approximately Rs 10 lakh crore. This market cap erosion was a reflection of the investor sentiment at the time, which was largely influenced by the governance concerns brought forward by the short-seller’s report.
However, in the subsequent months, there has been a remarkable recovery in the stock prices of the Adani Group companies. Notably, Adani Enterprises witnessed an impressive increase of nearly 150 percent in its stock price over the course of the last five months. This substantial recovery indicates renewed investor confidence and a positive shift in market sentiment.
GQG Partners, the US-based fund, has been a key player in this recovery. Their investments in Adani Group companies since the initial decline in March have yielded significant gains. As a result, the value of GQG Partners’ investments in Adani Group companies has now surged to approximately $4 billion. This illustrates the substantial gains that the fund has realized due to its strategic investments in the Adani Group’s recovery journey.
In summary, the Adani Group faced a notable decline in stock values following governance concerns raised by a US-based short-seller. This decline resulted in a significant loss in market capitalization for the group firms. However, the group’s stocks have shown a remarkable recovery, with Adani Enterprises leading the way by jumping nearly 150 percent in the last five months. GQG Partners, through its investments, has reaped substantial gains from the recovery in Adani Group companies, boosting the value of its investments to around $4 billion.
