GQG Partners, whose shares crashed Thursday after Gautam Adani and others were indicted in the US, announced a share buy back of up to $100 million Australian dollars (AUD). GQG is listed on the Australian Securities Exchange (ASX).
The announcement led to a sharp rally in its shares, which jumped more than 16 per cent to touch a day’s high of Australian dollar 2.48 against its previous close of AUD2.13. The stock later gave up most of the gains to settle at AUD2.21, marking a rise of 3.75 per cent over its last close.
Companies announce buybacks to support their share prices and distribute excess cash to shareholders.
GQG said in a regulatory filing that it will repurchase 2.9 billion securities over a year, starting November 25.
“The on-market buy-back recognises the significant market volatility at present and will allow GQG to opportunistically and flexibly acquire CDIs (CHESS Depositary Instruments on common stock),” GQG said.
“The board believes that the current CDI price significantly undervalues the company. GQG continues to have a strong and robust balance sheet which favourably positions the company to undertake this capital management initiative.’’
“We believe our stock is undervalued and this is a great investment opportunity. We have a strong balance sheet and GQG believes in the strength of its business. We’re happy to buy our stock at these values,’’ CEO Tim Carver said.
While the crash in its securities on Thursday came due to concerns over the exposure to the Adani group, GQG had said that its ``team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate’’.
During the quarter ended September 30, 2024, GQG reportedly increased its stake in four Adani group firms that included Adani Enterprises, Adani Green Energy, Adani Energy Solutions and Ambuja Cements.
GQG Partners Inc is an investment boutique headquartered in the US that focuses on managing active equity portfolios. As of October 31, 2024, it managed $159.4 billion for investors that include many large pension funds, sovereign funds, wealth management firms and other financial institutions in the world.
