'Adani Group used half of GQG's Rs 15,000 cr to pay margin calls,' alleges TMC's Mahua Moitra

A day after it emerged that Adani Group has done prepayment of share-backed financing worth Rs 7,374 crore, TMC MP Mahua Moitra alleged on Wednesday that the funding came from the Rs 15,446 crore the embattled conglomerate raised from US-based boutique investment firm GQG Partners.

"As expected. GQG deal to pay margin calls on pledged shares. Out of Rs 15000 crores almost half gone in payments," tweeted Moitra. Margin call means a demand by a broker that an investor deposit further cash or securities to cover possible losses. Moitra has been accusing Adani Group of various corporate governance violations ever since US short seller Hindenburg Research release a report alleging stock manipulation and improper use of offshore tax havens by the conglomerate, which it has denied.

The embattled Adani Group on Tuesday said it prepaid share-backed financing of Rs 7,374 crore ($901.16 million) to various international banks and Indian financial institutions, as part of its promoters' commitment to cut overall leverage backed by shares of the Group's listed companies.

The stake purchase by the boutique investment firm in four Adani firms marked the first major investment in billionaire Gautam Adani's conglomerate since a short-seller's critical report resulted in its listed firms losing about $130 billion in market value.

Last week, SB Adani Family Trust cumulatively sold about 21 crore in four of the Adani Group companies through the open market. GQG Partners bought 2.84 crore shares of Adani Transmission on Thursday at Rs 668.4 apiece aggregating to Rs 1,898 crore, 3.87 crore shares of Adani Enterprises at Rs 1,410.86 apiece aggregating to Rs 5,460 crore, 8.86 crore shares of Adani Ports at Rs 596.2 apiece aggregating to Rs 5,282 crore, 5.56 crore shares of Adani Green Energy at Rs 504.60 apiece aggregating to Rs 2,806 crore. Post-stake purchase, these firms' shares rose between 10.2% to 23.4% so far.

Adani Group is scheduled to hold road shows in London on March 8 and several US locations between March 9-15 to boost investor confidence.

Promoters of the Group's flagship firm, Adani Enterprises Ltd, will release 31 million shares, or a 4% stake, while Adani Ports' promoters will release 155 million shares, or an 11.8% stake, the Group said in a statement.

Promoters of Adani Green Energy and Adani Transmission will release 1.2% and 4.5% stakes in the respective companies.

Meanwhile, GQG Partners would likely expand its investment in the Adani Group, the fund firm's founder Rajiv Jain said on Wednesday.

"Chances are we'll probably buy more because we typically initiate a position and then depending on how things go and how the earnings come through we tend to get it to full size because we're not at full size at this point," Jain said on a call with journalists in Sydney.

Jain, based in Florida, flew to Australia this week for talks with investors, which include some of Australia's largest pension funds. Last week, pension fund investor Cbus Super, with A$71 billion ($46.82 billion) under management, told Reuters they had queried GQG about the Adani purchase.

A GQG spokesperson said Jain's trip had been planned for some time and the discussions included topics other than Adani.

"The response actually has been, frankly, more positive than I would have anticipated because they feel that's how we differentiate ourselves," Jain said, when asked how the clients have responded to the Adani deal.

"We do our deep dive, and we don't follow the herd," he said.

Jain said he has not had a conversation with the Adani group since the transaction because "there is nothing to talk about".

"We feel that we got an incredible opportunity to initiate positions and over time, the size will increase and most likely will increase depending on the price and how they deliver...," he said.

With inputs from Reuters