Markets watch closely as Gautam Adani boosts stake in Adani Enterprises

Adani Group chairman Gautam Adani has significantly increased his stake in Adani Enterprises through open market purchases. According to a statement released to the stock exchanges on 14 June, Adani, along with entities belonging to the promoter group, has acquired over two percent stake in Adani Enterprises between September 2023 and June 2024.

The acquisitions were made in multiple tranches, with the latest purchases occurring between 21 May and 12 June this year. During this period, Adani bought additional stakes through Kempas Trade and Investment as well as Emerging Market Investment DMCC, totalling 0.42 per cent and 0.92 per cent respectively.

A separate disclosure highlighted a 0.68 per cent stake acquired by Adani in September 2023 via Infinite Trade and Investment Ltd. These acquisitions have collectively boosted the total voting capital held by the acquirers and the promoter group from 71.95 per cent to 73.95 per cent.

This significant increase in Gautam Adani’s stake in Adani Enterprises carries substantial implications for both the company and the broader market, say experts. Amidst the recent market volatility and fluctuations in Adani Group’s share prices, Gautam Adani’s decisive action to increase his stake is being seen as a strategic manoeuvre to further solidify control and navigate challenges effectively.

Market observers meanwhile raised questions about whether Gautam Adani's substantial increase in stake in Adani Enterprises would continue to reflect broader sentiment and confidence in the company’s resilience and future growth or whether concerns should emerge regarding the potential implications for corporate influence on government-backed projects and regulatory oversight.

The timing of these acquisitions follows a recent downturn in Adani Group's shares, which plummeted by up to 25 per cent on 4 June, following a period of substantial gains. However, despite this setback, shares of Adani Enterprises have seen a positive trajectory, with a year-to-date increase of 12 per cent by June 2024.

Notably, the company has managed to recover from losses incurred after a short-seller report by Hindenburg Research in January 2023, erasing all losses by May 2024.

The announcement of Adani’s increased stake came after market hours on 14 June. Following the news, shares of Adani Enterprises settled 1.23 per cent higher at Rs 3,263.50.

This move is seen as a signal of continued confidence in the company's prospects by its key stakeholders amidst market fluctuations and underscores Adani’s commitment to furthering his interests in Adani Enterprises.