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Shares of Adani Power Ltd rose, hitting a one-day high of Rs 288.30 on the NSE in early trade on Wednesday. The increase follows a larger share of 8.1% by US. investment firm GQG Partners, and other investors sold after a massive $1.1 billion deal on Wednesday
The huge buying activity was reflected in huge trading volume, with over 3.872 lakh shares changing hands on the NSE. Despite the recent turmoil, the stock is trading at a 34% discount to its 52-week high of Rs 432.50 on the NSE.
The rise in Adani Power shares contrasted with the broader market, which saw the Nifty fall 0.33% and the S&P BSE Sensex trade down 0.29% around the same time.
The share sale attracted attention from several angles, as GQG Partners Emerging Markets Fund and Goldman Sachs GQG Partners International along with other investors acquired stakes in Adani Power at the same time Worldwide Emerging Markets Holding, the promoter group half, took 1.2%. Afro Asia Trade and Investments, the other promoter, fully offered its stake in the deal. In total, the promoter group companies took about 8.1% stake in Adani Power.
The strategic move by GQG Partners to invest heavily in Adani stocks stands out, especially in the aftermath of corporate governance concerns raised by US-based short seller Hindenburg. Back in March, GQG invested over Rs 15,000 crore and acquired stakes in four Adani companies, including Adani Enterprises.
Since then, GQG Partners has consistently increased its holdings across various Adani group companies, signaling confidence in the group's prospects. Notably, in June, GQG invested an additional $1 billion (Rs 8,265 crore) to secure more stakes in Adani Enterprises and Adani Green Energy. As of June 2023, GQG holds 2.67% in Adani Enterprises and 3.5% in Adani Green Energy.
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Adani Power’s financial performance has also contributed to investor sentiment. The company reported a robust consolidated profit of Rs 8,759 crore for the quarter ended June, reflecting an impressive 83% year-on-year growth. Meanwhile, operating income faced a 19.8% decline to Rs 11,005.5 crore as against Rs 13,723 crore in the corresponding quarter of the previous fiscal year.
In conclusion, Adani Power’s recent share sale to GQG Partners saw its shares rise sharply against broader market trends. The move coincides with GQG’s growing confidence in Adani Group’s ability even in the face of external challenges. As the market continues to watch for growth, the focus is on how Adani Power’s strategic operations and financial performance will shape its course in the coming months.
