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Florida-based investment group GQG Partners has bought a 6 per cent stake worth an estimated $290mn in an Indian foods company fronted by controversial yoga televangelist Baba Ramdev.
The investment in Patanjali Foods marks a further bet on India by GQG, which in March invested almost $2bn in the embattled conglomerate of infrastructure tycoon 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 also courted controversy by describing modern medicine as a “stupid bankrupt science” during the coronavirus pandemic.
In a filing to Indian stock exchanges on Monday, GQG said it had acquired 21.5mn shares in Patanjali, 5.96 per cent of total shares of the biscuits-to-edible oils seller.
GQG did not disclose how much it paid for the stake, but the clearing price for professional bidders was Rs1,103.8 per share, according to the BSE stock exchange. This would suggest GQG paid around Rs23.8bn ($290mn).
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.
GQG’s founder and chief investment officer, Rajiv Jain, was the first major investor to bet on the Adani Group after US short seller Hindenburg Research hit the conglomerate with a short selling attack in January this year.
Hindenburg, in January, published a report alleging share price manipulation and accounting fraud — accusations Adani strongly denied. The report wiped about $150bn off the market value of listed Adani Group companies at their lowest point.
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 businesses are based. Adani has long denied any inappropriate links with the premier.
The sale of the Patanjali stake allows the food company to meet Indian securities rules that require at least 25 per cent of a listed company’s shares to be held by outside investors.
Patanjali offered shares for sale last week to reduce its own holding from more than 80 per cent to 75 per cent of shares. It had been courting investors, and conducted investor presentations in New York, Chicago and Boston last month.
The Patanjali deal reveals a deepening business 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 introduced GQG to Adani.
GQG and Jefferies did not immediately respond to requests for comment.
