LIC chairman MR Kumar says shareholders, policyholders need not worry about insurer's exposure to Adani Group

State insurer Life Insurance Corporation (LIC) Chairman M R Kumar on Friday said that the shareholders and policyholders should not worry about their investments amid rumours of its overexposure to the Adani Group companies. The Adani Group has been under fire ever since US-based short seller Hindenburg Research, in a detailed report, raised questions on the debt positioning of the group companies. Since the report was released on January 24, LIC and State Bank of India have been under scanner over their investment and debt exposure in Gautam Adani-owned companies.

"I like to tell the shareholders and policyholders that there is nothing to worry. There is not even 1 per cent risk for the policyholders, shareholders. There will be no impact on the investments as such whatsoever. We will see that this issue is taken care of. This is not such a big thing. It is just a drop in the ocean," said Kumar in an exclusive interview with Business Today TV Managing Editor Siddharth Zarabi.

A week after the Hindenburg report was published, which led to a massive sell-off of Adani Group shares in the stock market, LIC issued a statement and clarified that the state insurer has invested over Rs 36,000 crore in Adani Group companies.

The total purchase value of equity, purchased over the last many years, under all the Adani Group companies was over Rs 36,000 crore and the market value as on January 27 was Rs 56,142 crore.

“The total book value to Adani Group companies is Rs 33,000 crore as of January 2023. This we have already shared. Of this, Rs 6,000 crore is debt value. Besides, the debt part is the standard debt,” Kumar said in the interview.

On being asked about meeting the top management of the Adani Group to discuss the whole issue, Kumar said: "The company will soon contact the Adani group's top management to get a better understanding of the whole issue surrounding the recent events. In a week or 10 days, our investment team and other officials will be meeting them and discussing the future plans for the situation."

On Thursday, Kumar in a press conference said that he will take a view on the company's investment in the Adani Group two to three years from now after meeting the management of the Adani Group to understand what was happening in the market.

On February 7, Union Minister of State for Finance Bhagwat Kisanrao Karad informed the Parliament that the LIC has invested Rs 30,127 crore over the last many years to purchase equity stakes in various Adani group companies. In a reply to a question in Rajya Sabha, Karad said LIC’s total holding in Adani group companies which includes both equity and debt is at Rs 35,917 crore as on December 31, 2022. “Total purchase value of equity, purchased over the last many years, under all the Adani group companies is Rs 30,127 crore and the market value for the same as at close of market hours on 27.01.2023 was Rs 56,142 crore,” the minister said.

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