LIC portfolio value in Adani cos rebounding

GQG Investment-led Boost

- GQG Partners infused Rs5,460 cr in Adani Enterprises

- Adani group owns 35% of the port capacity in India

Group able to make huge revenue in terms of facilitating exim biz

Group also owns cement companies like Ambuja, ACC

- It recently received a capital infusion of Rs15,500 cr from a global investor

Mumbai: The value of investment made by LIC in the Adani stocks has surged to around Rs33,000 crore now from Rs30,000 crore when the US-based short-seller Hindenburg released damaging report on the Group on January 24. If the corporation’s investment in other Adani group entities like ACC and Ambuja is included, then the value of LIC’s investment has gone up to around Rs39,000 crore from nearly Rs35,000 crore during the period, market sources revealed. The reason for the surge was the rally happening in the capital market, thanks to huge investment made by GQG into the group.

Adani shares, over the last few working days, particularly since GQG invested on Thursday last have gained sharply. GQG bought between two per cent to four per cent stake on Thursday in four of Adani Group-backed companies.

Purchase price of Adani Enterprise was Rs1408, when it was bought by GQG on Thursday last. The share of the company closed at Rs1,607 on Thursday itself and Rs1,879 on Friday and Rs1,983 on Monday, up 40.8 per cent. GQG Partners infused Rs5,460 crore for 38,701,168 equity shares in Adani Enterprises, while the US-based company purchased 8.86 crore equity shares for Rs5,282 crore in Adani Ports. Also, the boutique investor bought 2.84 crore equity shares for Rs1,898 crore in Adani Total Gas, and 5.56 crore equity shares for Rs2,806 crore in Adani Green Energy.

On Thursday last, flagship firm Adani Enterprises stock gained nearly three per cent, while Adani Ports jumped by 3.5 per cent. Adani Total Gas saw an upside of 4.4 per cent. While the remaining Adani stocks such as Adani Transmission, Adani Power, Adani Wilmar, and Adani Green Energy hit a five per cent upper circuit each on BSE.

Talking to Bizz Buzz, Arun Kejriwal, Founder of KRIS, says: “The large investor GQG has demonstrated its confidence in the Adani group and invested Rs15,600 crore in four Adani group cos.”

GQG has brought to the table a newfound confidence and created a base for its stock prices. This should become very strong support going forward until and unless some new disaster with Adani, he said. The market cap of Adani Group stocks climbed rapidly after the deal.

Meanwhile, the LIC top honchos are satisfied with the cashflow of the Adani group, as explained by the company in the presentation recently.

In the presentation, the Adani group official told LIC top brass that its debt service coverage ratio has improved like anything during last few days. When the cashflow increases in the long term, then the company will also be able to even repay the principal loan too. As and when interest amount comes down, profitability of the company will go up too. It is worth mentioning here that LICs investment into the group has been built over past few years and during that period, the stock prices of the listed companies of the group were available at a reasonable price for LIC. Analysts say Adani group owns around 35 per cent of the port capacity the country boasts of. As a result, the group will be able to make huge revenue in terms of facilitating export and import of goods. Not to mention that the group owns cement companies like Ambuja and ACC. Therefore, the Group unlikely to have any cashflow issues in future.

The large investor GQG has demonstrated its confidence in the Adani group and invested Rs15,600 crore in 4 Adani group cos. GQG has brought to the table a newfound confidence and created a base for its stock prices

- Arun Kejriwal, Founder of KRIS, tells Bizz Buzz