Market insight: MSC/Boluda/Adani – the Devil's Triangle
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Adani Group has raised some $1.9bn by offloading stakes in four of its frontline entities, including port arm Adani Ports and Special Economic Zone (APSEZ).
US-based asset management firm GQG Partners, co-founded by India-born Rajiv Jain, became the investor to cash in on the lower stock valuations from Adani’s recent equity market setbacks, triggered by adverse disclosures by US-based stock short-seller Hindenburg Research in late January.
A 4.1% stock sale in APSEZ brought Adani some Rs5,282 crore ($645m). The Ahmedabad-headquartered group said GQG’s investment would refuel infrastructure development and trade growth in India.
Group CFO Jugeshinder Singh said: “This transaction marks the continued confidence of global investors in the governance, management practices and the growth of the Adani portfolio of companies.”
Rajiv Jain, co-founder and chairman of Florida-based GQG, said: “We believe the long-term growth prospects for these companies are substantial, and we are pleased to be investing in companies that will help advance India’s economy and energy infrastructure.”
Ironically, the deal announcement coincided with the Indian apex court setting up a committee to look into the allegations levelled by Hindenburg, which accused Adani of market trading manipulation and stock overvaluation and led to its stocks crashing, with losses of some $145bn in a few weeks.
The committee will submit its report in two months and Adani welcomed the proposed probe. It said: “It will bring finality in a time-bound manner, and truth will prevail.”
The divestment move indicates that the conglomerate is acting quickly and aggressively to repair the damage and prepare for further expansion, with marine terminal reach seeing a heavier focus in recent years.
According to the latest market data, despite demand challenges, APSEZ is poised to end the current fiscal year (2022-23) with record cargo volumes, aided in large part by its strategic terminal partnerships with liner giants MSC and CMA CGM at Mundra Port.
APSEZ CEO Karan Adani said: “Mundra alone handled 3,508 commercial vessels [this fiscal year], hosting the country’s largest containership call, of the APL Raffles, and the deepest-draught vessel, MSC Washington. The engagement with container lines and the resolve to deliver on commitments has led to more new services at APSEZ terminals, raising volumes.”
These carrier partnerships have also driven significant regional transhipment volumes for Mundra, helping it dominate the Indian containerised trade growth. Adani’s transhipment loads last month were 135,320 teu of a total 471,646 teu handled by its four Mundra terminals, according to data obtained by The Loadstar.
Looking to boost market share and “harvest potential synergistic benefits from a broader network”, the group has rapidly expanded its Indian port portfolio through targeted acquisitions in recent years. As a result, APSEZ now operates 13 active port locations in India.
At the same time, its holdings in international port logistics operations have also expanded. They now include: an under-construction 3.5m-teu container transhipment terminal at Sri Lanka’s Colombo Port, known as West Container Terminal; a joint-venture with AD Ports for “strategic investment opportunities” in Tanzania; and a recent deal for long-term concession rights at Israel’s Haifa Port.
Besides port-related interests, including inland and rail logistics, the Gautam Adani-led group has a diverse business profile in India, spanning airports, mines, data centres, power generation and power transmission.
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