Gautam Adani ‘bribery’ case: GQG refuses to sell Adani shares; here’s why

GQG Partners, one of the biggest foreign institutional investors in Adani Group, decided not to sell its stake in the conglomerate. The investment giant, in an official statement, said its exposure to the Adani Group stocks, even during stock market volatility, was manageable. 

According to the disclosure, the American investment giant has a total exposure of $9.7 billion to the Adani Group of companies on a total asset base of $158.6 billion, marking up to 6.1 per cent of the company's total assets.

“As of Tuesday, 19 November (the day before the indictments), GQG had total exposure to Adani Group companies of USD $9.7B on a total asset base of USD $158.6B, representing roughly 6.1 per cent of our total assets,” said the investment company. 

Adani Group's flagship company, Adani Enterprises Ltd, shares closed 1.26 per cent higher at ₹2,257.65 on Monday, November 25, compared to ₹2,229.65 at the previous market close. 

The company also said that the exposure is weighed differently among strategies, with the most weightage going to emerging markets and international strategies. There was “no exposure in our US equity strategy.” 

“We believe this level of exposure is manageable, even given the volatility in Adani Group stocks,” said GQG Partners in the statement.

US market regulator's claims won't impact Adani

As of Thursday, November 21, GQG Partner's total exposure was $8.1 billion on total assets of $156.7 billion, or 5.2 per cent of the total assets for the company.

On the allegations front, the company does not feel the US securities regulator's claims will have any material impact on Adani Group's business.

“We do not see these actions as having a material impact on these businesses,” said GQG.

The foreign investor also highlighted that the Adani Group companies operate critical infrastructure regulated by the Government of India. In the majority of cases, these are services with long-term contractual revenues. 

The investment firm noted that Adani Green Energy Ltd (AGEL) is an exception to this clause. “We understand that the Adani companies do not need to raise more capital at this point,” it said. 

“We will remain diligent in re-underwriting our positions and examining any new facts,” said GQG, focusing on the fact that even though it does not expect anything, any negative action from the Indian government could have meaningful implications.

Responding to the question of prior allegation from the US-based short seller Hindenburg Research, GQG Partners said that after reviewing the allegations, it found no direct connection to the SEC indictment claims.

“The allegations made by Hindenburg show no direct connection to the allegations made in the SEC indictment,” it said in the official statement.