Adani stocks surge for the fourth day after a $1.8 billion stake sale

Adani empire's shares surged on Friday after an Indian-led US boutique investment firm, GQG, buys a $1.87 billion worth stake in the group. That marks the first significant investment in the Indian business empire since Hindenburg's report sparked a stock rout.

The US boutique investment firm's stake purchases boosted billionaire GautamAdani-led firms shares, which have plunged by over $130 billion in market value US-based and Australia-listed GQG has purchased shares in fourAdanicompanies, including the group's flagship firmAdaniEnterprises, through block deals.

Founded in 1987 and headquartered in Fort Lauderdale, Florida, GQG manages $88 billion across equity funds.

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According to a regulatory filing, GQG invested 3.4 per cent inAdaniEnterprises for around $662 million, 4.1 per cent inAdaniPorts for about $640 million, 2.5 per cent inAdaniTransmission for about $230 million, and 3.5 per cent inAdaniGreen Energy for about $340 million.

GQG's chairman and chief investment officer, Rajiv Jain, said "we believe that the long-term growth prospects for these companies are substantial".

ALSO READ | Adani-Hindenburg: Supreme Court constitutes expert panel, issues two-month deadline to SEBI

According to the CIO, before investing, GQG did a "deep dive" as part of due diligence.

The investment firm had conversations with the group's vendors, bankers and partners, according to the CIO, who also said that infrastructure companies are subject to tight regulation and therefore the risk of fraud is low.

Jain added, "we actually disagree with (Hindenburg's) report," referring to a scathing report by the US research firm on January 24 accusingAdaniGroup of business and tax fraud.

Since Hindenburg's allegations, the market value of seven listedAdanicompanies has plunged by about $135 billion. The organisation, headed by billionaire GautamAdani, has denied those claims, but subsequently cancelled a $2.5 billion share sale.

The group, though, has been trying to reassure investors by using road shows and phone calls. A Reuters report showed the business empire has secured a $3 billion loan from a sovereign wealth fund.

But a separate report from Bloomberg showed the business denied that news. GautamAdani-led firms have repaid loans to calm investors' nerves. The prepayment of loans plan has helpedAdanifirms' shares.

The group's stocks extended their gains for the fourth straight day on Friday.

Shares ofAdaniEnterprises have jumped nearly 80 per cent from their recent lows,AdaniPorts stock has surged 70 per cent, and shares ofAdaniPower have recovered by nearly 50 per cent. Shares in the rest of the group firms have risen between 18 and 28 per cent.

Separately, on the same day as the US boutique investment firm's stake buy in theAdaniGroup, India's top court asked market regulator SEBI to look into theAdanigroup for potential business violations and submit a report within two months.

The top court also constituted an expert committee to look into the regulatory mechanism and suggest measures to protect investors from step losses as seen in theAdaniGroup stock losses.

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