PSU bank stocks rose sharply on Friday after the Adani Group announced that it has sold stake in four of its listed companies to US-based GQG Partners for ₹15,446 crore via a block deal on Thursday.
The stake picked up by a leading global investment firm like GQG Partners is seen as a positive development for Adani Group, which has been embroiled in a series of allegations ranging from stock manipulation to high levels of debt, levelled by short-seller Hindenburg Research.
In an effort to regain the trust of investors, the Adani Group implemented several measures, such as prepaying its loans ahead of maturity, ensuring that the group companies faced no significant refinancing risk, and holding off fresh capital expenditure by scrapping a ₹7,017 crore deal to buy the thermal power assets of DB Power.
Despite these efforts, the group's stocks continued to decline until the recent investment by GQG Partners which brought some relief.
In addition, the stake sale also lifted the PSU bank stocks, which had been underperforming for quite some time now on concerns over loan exposure to the conglomerate. All 12 constituents in the Nifty PSU Bank index ended the day in the green, with Union Bank of India standing at the top with a gain of 8.3% to ₹72.4.
Other banking stocks, including UCO Bank, Punjab Sind Bank, Bank of Maharashtra, Indian Bank, Bank of India, Indian Overseas Bank, SBI, Canara Bank, and Bank of Baroda, also saw significant gains in the range of 5–8%.
Between January 24 and February 28, the Nifty PSU Bank index experienced a significant decline, dropping from a value of 4,190 to 3,658. This represents a fall of 12.69% in just over a month.
Meanwhile, the stake purchase by GQG Partners marked the first major investment in billionaire Gautam Adani's conglomerate since the Hindenburg report which resulted in seven of the Indian group's listed firms losing about ₹11 lakh crore in market value.
According to the company's exchange filing, GQG Partners bought 8.86 crore shares of Adani Ports & SEZ at ₹596.20 apiece for ₹5,282 crore, 5.56 crore shares of Adani Green Energy at ₹504.60 apiece for ₹2,806 crore, 3.87 crore shares of Adani Enterprises at ₹1,410.86 apiece for ₹5,460 crore; and 2.84 crore shares of Adani Transmission at ₹668.40 apiece for ₹1,898 crore.
In response to the positive news, six out of seven Adani Group stocks were locked in the upper circuit in Friday's trade. During the entire week, the group stocks performed well and also recorded their best week since January 24.
Adani Enterprises stood as the top gainer in the pack with a rally of nearly 43%, followed by Adani Ports & SEZ, Adani Green Energy, and Adani Power with gains of 23%, 16.5%, and 15.25%, respectively.
The combined market value of the seven listed Adani Group stocks has witnessed a sharp rise of ₹1,29,546 crore this week, pushing the overall market value to ₹7,62,296 crore from ₹6,32,732 crore in the previous week.
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