In a concerted move that captured the world's attention yet again last week, India's billionaire Adani family sold off stakes worth roughly $1 billion in their group's two mainstay companies, Adani Enterprises Ltd and Adani Green Energy. 

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This significant sale has been seen as an attempt to restore market confidence after a damning report from US short seller Hindenburg Research earlier this year that had alleged accounting fraud and share price manipulation at the Adani Group, resulting in a market downturn that wiped out an estimated $150 billion from its peak market value.

Buys and Sales

Fortitude Trade and Investment offloaded its entire stake in Adani Transmission, amounting to about Rs 2,665 crore last Friday, while GQG Partners picked up stakes worth Rs 1,676 crore, marking another investment milestone for the company within the Adani conglomerate. The company was dropped from index maker MSCI’s India equities benchmark in May. (Adani Total Gas was also removed.)

As per the data disclosed to exchanges, GQG Partners acquired a 1.9% stake in Adani Transmission, translating to about 2.13 crore shares. Interestingly, this move follows a trend for GQG, which has been gradually increasing its investment in the Adani Group since the Hindenburg report surfaced.

This year alone, the firm has purchased shares worth just shy of $1.9 billion USD in four Adani stocks. Additionally, it recently acquired 1.19 crore shares of Adani Green Energy on June 28, thus substantiating their continued faith in the Group.

Mixed Reaction

Despite the controversy surrounding the Adani Group, these large block trades have seen GQG and other investors buying up significant portions of Adani stock. The family sold 18 million shares in Adani Enterprises Ltd (a 1.6% stake), and 35.2 million shares in Adani Green Energy (a 2.2% stake).

The sale was met with a mixed market reaction. Adani Enterprises saw its share price rise by 5%, while Adani Green fell by around the same amount early on before recovering most of the losses. 

In response to the controversy, the Adani Group has been taking significant steps to reinforce investor confidence, including moves by the boards of both Adani Enterprises Ltd and Adani Transmission Ltd to approve a raise of up to Rs 21,000 crore (over $2.5 billion) via share sales to institutional investors. These funds are expected to be used to reduce debt and fund the group's expansion projects.

Furthermore, the Adani Group has communicated to its investors a promising outlook of a 20% year-on-year increase in EBITDA to Rs 90,000 crore in the next 2-3 years, suggesting a strategic shift and a strong focus on improving its financial position.

This unfolding narrative underlines the resilience of the Adani family in the face of adversity, their strategic maneuvers aimed at restoring market faith in their operations, and the intrigue of global investors like GQG Partners who see opportunity amid the tumult.