GQG Partners Increases Stake in GMR Airports

GQG Partners has made another strategic investment in GMR Airports Infrastructure Limited by acquiring an additional 4.5 crore shares, equivalent to a 0.43% equity stake, via a bulk deal on August 23, according to an exchange filing. With this purchase, GQG’s total stake in the company has risen to 5.17%.

A History of Strategic Investments

Initially, GQG Partners, led by Rajiv Jain, acquired a 7.66% stake in GMR Airports in December 2023 through open market transactions, purchasing shares at an average price of Rs 59.09 per share, amounting to a total of Rs 1,671.55 crore. However, a subsequent corporate action by GMR Airports led to a reduction in GQG’s holding to below 5%. This recent acquisition has restored its stake to above the 5% mark.

Diversifying Beyond the Adani Group

GQG Partners has been actively investing across various sectors in the Indian equity market, including infrastructure, consumer goods, and energy. This recent acquisition in GMR Airports Infrastructure marks another step in their strategy beyond their more widely-publicized investments in the Adani Group.

In an interview earlier this year, Rajiv Jain emphasized that GQG’s investment in airports is not only based on passenger growth but also a strategic play on real estate. “We feel that there are meaningful upsides in these assets,” Jain remarked.

Financial Performance of GMR Airports

For the first quarter ending June 30, GMR Airports Infrastructure reported a consolidated net loss of Rs 258.2 crore, compared to a net loss of Rs 122.50 crore in the same period last year. Despite the loss, the company’s revenue from operations increased by 19.06%, reaching Rs 2,402.20 crore, up from Rs 2,017.63 crore in the corresponding period of the previous fiscal. At the operating level, the EBITDA stood at Rs 1,016.35 crore for the first quarter, an improvement over Rs 860.82 crore in the previous fiscal’s corresponding quarter.

Stock Performance in August

Despite the company’s ongoing expansion and revenue growth, the stock’s performance in August has been somewhat lackluster, registering a negative return of 6.2%. However, on a year-to-date (YTD) basis, the stock has shown a promising increase of 18.5%.

GQG Partners’ increased stake in GMR Airports signals confidence in the company’s long-term growth prospects, particularly in its ability to leverage both the aviation sector and related real estate opportunities.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.