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By Scott Murdoch, Nandan Mandayam and Yousef Saba
SYDNEY/BENGALURU (Reuters) -Adani shares surged on Friday after a $1.87 billion investment in the group by GQG Partners Inc eased concerns about the group's ability to attract funding, while the conglomerate lined up more road shows to shore up investor confidence.
The stake purchase by the boutique investment firm marked the first major investment in billionaire Gautam Adani's conglomerate since a short-seller's critical report resulted in seven of the Indian group's listed firms losing about $130 billion in market value.
In the Jan. 24 report, U.S.-based Hindenburg Research noted high debt and alleged improper use of offshore tax havens and stock manipulation, which Adani denied. A dive in Adani stocks then prompted the group to shelve a $2.5-billion share sale.
GQG's deal "may assuage concerns about the group's ability to raise funding for the repayment of loans against its listed company shares," analysts at Kotak Institutional Equities said.
Adani Group will hold road shows this month in London, Dubai and several cities in the United States, according to a document seen by Reuters.
The meetings are scheduled for Dubai on March 7, London on March 8 and several U.S. locations between March 9-15, the document showed.
Adani did not immediately respond to a Reuters' request for comment.
Earlier this week, two sources with knowledge of the matter said Adani has told creditors it has secured a $3 billion loan from a sovereign wealth fund.
India's top court on Thursday asked market regulator SEBI to investigate the group for any lapses related to public shareholding norms or regulatory disclosures.
Overall, Adani group firms' net debt totalled $24.1 billion as of September 2022.
"The stake buying yesterday was a good market booster for Adani Group stocks which have seen a long spell of underperformance and widespread selling," said Avinash Gorakshakar, head of research at Profitmart Securities.
Adani firms said on Thursday that GQG bought 3.4% of Adani Enterprises Ltd for about $662 million, 4.1% of Adani Ports and Special Economic Zone Ltd for $640 million, 2.5% of Adani Transmission Ltd for $230 million and 3.5% of Adani Green Energy Ltd for $340 million.
Shares of flagship Adani Enterprises rose as much as 17.5% on Friday, while Adani Ports surged 10%. Adani Green Energy and Adani Transmission jumped 5% each.
Dollar bonds issued by Adani entities also rallied, with Adani Green Energy's 2024 bond adding 2.3 cents on the dollar to trade at 85.5 cents, while most bonds issued by Adani Ports and Special Economic Zone, Adani Transmission and Adani Electricity Mumbai rose by more than 1 cent.