Has LIC’s Investment In Adani Group Turned Negative? EXPLAINED

LIC's investment value in Adani Group considering the December shareholding data stood at around Rs 62,550 crore. There is a difference of Rs 6,408 crore (approx. 10 per cent) from what LIC said on 27 January 2023.

New Delhi: The impact of Hindenburg Research’s report against Gautam Adani and his business empire is having a spillover effect on companies that have invested in the Adani Group. Even though considering the total size of India’s largest insurer, the Life Insurance Corporation (LIC), its exposure to Adani Group is minute, there is a chance that the investment is currently going to witness loss if not already in a loss.

The investment value of LIC in Adani Group companies stood at Rs 33,632 crore as of 22 February 2022, as per the December shareholding pattern available on the exchanges.  The insurance behemoth on 27 January 2023 disclosed that the value of its investments in the Adani Group stood at Rs 56,142 crore.

LIC had invested Rs 30,127 crore in 7 of 10 Adani stocks. As per market data, as of 22 February 2023, the value of LIC’s investment in Adani stocks has come down to Rs 33,632 crore.

LIC’s investment value in Adani Group considering the December shareholding data stood at around Rs 62,550 crore. There is a difference of Rs 6,408 crore (approx. 10 per cent) from what LIC said on 27 January 2023.

The question is did LIC sell about 10 per cent of its holding in Adani Group companies between 1 January 2023 and 24 January 2023?

Suppose LIC did sell 10 per cent of its stake in Adani Group companies in the aforementioned period. We already said that the value of LIC’s investment in Adani Group companies as of the 22 February 2023 close was Rs 33,632 crore. If this 10 per cent is reduced from the total investment, as of 22 February 2023, LIC’s investment value in Adani Group was Rs 30,221 crore — profit of Rs 94 crore.

Yesterday, 23 February 2021, as of 12 noon, LIC’s investment value in Adani Group companies depreciated by another Rs 500 crore, as per CNBC-TV18. This means LIC’s investment in Adani Group has already turned into a loss if LIC did sell 10 per cent of its stake in Adani Group as was supposed.

As on 30 September 2022, LIC’s total assets under management (AUM) were over Rs 41.66 lakh crore. LIC had said that its exposure to Adani Group is less than 1 per cent of its total AUM at book value.