Florida-based boutique investment manager GQG (Global Quality Growth) raised its stake in GMR Airports Infrastructure last week, bringing it back up to over 5% as it seeks to capture the potential it sees in the Indian airports and infrastructure market and capitalize on what is a newly merged business.

The increase in the owner of Delhi and Hyderabad airports was not large—from 4.74% to 5.17%—but going past 5% required a regulatory filing. GQG is a wholly owned subsidiary of GQG Partners Inc., listed on the Australian Securities Exchange (ASX:GQG).

In a letter to the National Stock Exchange of India dated August 27, GQG Partners outlined the acquisition details. Its equity shares rose from 501 million to 548 million, with most of the increase attributable to GQG Partners’ Emerging Markets Equity Fund whose holding went from 109.3 million to 141.2 million.

Last year, GQG also took a stake in the beleaguered Adani Group—an opportunistic purchase made under Rajiv Jain, GQG’s Chairman and CIO. Diversified Adani—whose businesses straddle airports to energy—lost billions in market value following allegations of widespread fraud by U.S.-based Hindenburg Research in January 2023.

Adani, a bellwether for the Indian market, mounted a robust defense by releasing documentation supporting its position, but the damage was done. The company’s flagship listed entity, Adani Enterprises, saw a cliff-edge stock fall at the time and the company is yet to return to its peak value which was seen at the end of 2022.

Strategic & Opportunistic Acquisitions

During the turmoil, GQG took the opportunity to swoop, bagging a stake in Adani Enterprises whose assets span airports to logistics to utilities. In an interview with Bloomberg at the start of 2024, Jain said: “I wouldn’t have predicted that Adani would have come along all of a sudden last January.”

Careful stock picks in tech, energy, AI, and other sectors from the investment player, in companies like Nvidia, Meta, and Petrobras, appear to be well regarded. GQG Partners’ share price has soared since December 2023 from A$1.32 to just below A$3.000 this summer.

GQG did not comment on its increased stake in GMR Airports or the sharply rising value of the group’s India portfolio in the past 18 months. The rationale seems to be based on the long-term value of the stock. Year-to-date GMR is up by 17%, and by 50% over the past 12 months. Jain said: “What we look for is barriers to entry—are these replaceable businesses or not and is their outlook improving?”

Infrastructure Dividends to be Had

Jain remains bullish on India. He told Bloomberg: “If you look at the underpinning on the infrastructure side, the government is spending more and there is a lot of privatization happening.” He believes that infrastructure remains in a fledgling state so getting in early will reap more dividends on the subcontinent.

In the summer, the International Air Transport Association (IATA) announced that its 81^st AGM and World Air Transport Summit would be held in Delhi in June 2025.

IATA’s Director General, Willie Walsh, commented: “It’s been over four decades since the industry came together for an IATA AGM in Delhi. With record aircraft orders, impressive growth, and world-class infrastructure developments, India is firmly on the trajectory to become the world’s third-largest aviation market in this decade. With such bright prospects, it’s the perfect time to return to India and witness these exciting developments firsthand.”

Airline IndiGo is hosting next year’s event and its CEO Pieter Elbers, added: “India is leading the fourth industrial revolution with the use of AI; it is a nation on the move. India’s rise in the global aviation landscape over the last years has been nothing short of remarkable.”