The US investment group GQG supports the Indian food trade

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Florida-based investment group GQG Partners has bought a 6 percent stake valued at about $290 million in an Indian food company led by controversial TV venerator Baba Ramdev.

The investment in Patanjali Foods marks a further bet on India by GQG, which in March invested nearly $2 billion in the conglomerate of embattled infrastructure mogul Gautam Adani.

Ramdev, whose yoga channel is watched by millions, is the face of Patanjali and a non-executive director. He has in the past campaigned for India’s Prime Minister Narendra Modi and has stirred up controversy by calling modern medicine a “stupid, bankrupt science” during the coronavirus pandemic.

In a filing to Indian stock exchanges on Monday, GQG said it had acquired 21.5 million shares in Patanjali, 5.96 percent of the total shares of the biscuit-to-edible oils company.

GQG did not disclose how much it paid for the stake, but the clearing price for professional bidders was 1,103.8 rupees per share, according to BSE. This may indicate that GQG paid around 23.8 billion rupees ($290 million).

GQG is betting heavily on India’s economic growth. In a blog posted on its website in June, GQG praised Modi for making business-friendly reforms and “following the playbook” of world leaders including Margaret Thatcher, Ronald Reagan and Lee Kuan Yew of Singapore.

Rajiv Jain, founder and chief investment officer of GQG, was the first major investor to bet on the Adani Group after US firm Hindenburg Research, the shorting company, hit the group with a short selling attack in January this year.

In January, the Hindenburg published a report alleging stock price manipulation and accounting fraud — accusations that Adani has vehemently denied. The report wiped out about $150 billion from the market value of Adani Group companies listed at their lowest levels.

Opposition politicians have accused Adani and Modi of having a close relationship, dating back to Modi’s time as Chief Minister of Gujarat, where Adani’s business is centered. Al-Adani has long denied having any improper links with the prime minister.

The sale of Patanjali’s stake allows the food company to meet Indian securities rules that require at least 25 percent of the listed company’s shares to be held by outside investors.

Patanjali offered shares for sale last week, reducing its ownership from more than 80 per cent to 75 per cent of the shares. She’s been courting investors, giving investor presentations in New York, Chicago, and Boston last month.

The Patanjali deal reveals a deep working relationship in India between GQG and US investment bank Jefferies Financial Group, which acted as brokers for Patanjali Foods in the sale along with IIFL Securities. Jefferies also provided GQG to Adani.

GQG and Jefferies did not immediately respond to requests for comment.

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