GQG Partners Inc’s Australian-listed shares fell by as much as 3% on Friday after the international investment firm pumped $1.87 billion into four companies under embattled Indian conglomerate Adani Group.
The Florida-based firm bought 3.4% of Adani Enterprises Ltd for about $662 million, 4.1% of Adani Ports and Special Economic Zone Ltd for $640 million, 2.5% of Adani Transmission Ltd for $230 million, and 3.5% of Adani Green Energy Ltd for $340 million, showed an Adani regulatory filing.
By mid-afternoon, GQG shares were off 2.6% whereas the S&P/ASX200 benchmark index was up 0.42%.
Meanwhile, shares of the Adani Group companies GQG invested in rose as much as 5% to 10%, with flagship firm Adani Enterprises hitting a two-week high.
GQG’s move represents the first major investment in Adani Group since a short-seller’s critical report of the conglomerate triggered a stock rout.
Seven listed Adani firms have lost some $135 billion in market value since Jan. 24 when Hindenburg Research accused the group of improper use of offshore tax havens and stock manipulation.
The group, led by billionaire Gautam Adani, denied the allegations.
GQG’s Chairman and Chief Investment Officer Rajiv Jain told Reuters the Australian-listed firm had carried out its own “deep dive” into Adani and disagreed with Hindengurg’s report.
“Based on past comments of Rajiv Jain, he is the type of investor that goes for wherever there is unrealised value,” said Morningstar analyst Shaun Ler who covers GQG Partners
“He does not explicitly run an ESG fund, and importantly, his investors are well aware of that,” he said in reference to GQG buying into Adani which has major coal assets. ESG stands for environmental, social and governance.
“There will be people who avoid buying GQG due to Rajiv’s decisions; there will also be those who want to invest with them given their good performance.”
GQG’s stock is up 3.58% so far this year which is in line with the ASX200.
Jain is founder, chairman and chief investment officer at GQG. He also serves as portfolio manager for all of its strategies, showed his profile on GQG’s website.
GQG listed on Australia’s stock exchange in October 2021, raising A$1.18 billion ($794.97 million), making it Australia’s largest listing for the year. Jain retains a 68.8% stake.