‘More confident of Adani Group’s business prospects’: LIC chairman on meeting Adani management

Insurance behemoth LIC chairman MR Kumar has said that his team has met up with the Adani Group's top management amid the whole Adani-Hindenburg issue. He said that LIC after the meeting is more confident of its business prospects with the port-to-power conglomerate, Kumar told CNBC-TV18 in an interview.

Last month, in an exclusive interview with Business Today TV Managing Editor, Siddharth Zarabi, Kumar said LIC is scheduled to meet the Adani Group management to get a better understanding of the whole issue.

The port-to-power conglomerate has been under fire since US-based short seller Hindenburg Research accused the Gautam Adani-led group of stock manipulation, running offshore shell companies for round-tripping, and misusing corporate governance practices.

Since the report was made public, LIC's exposure to Adani group firms' stock has come under scrutiny. The insurance major has invested in seven of 10 listed companies of the Adani Group. As of December 2022, LIC held 9.14 per cent in Adani Ports; 5.96 per cent in Adani Total Gas; 4.23 per cent in Adani Enterprises; 3.65 per cent in Adani Transmission; and 1.28 per cent in Adani Green Energy.

Since the report was made public, LIC's exposure to Adani group firms' stock has come under scrutiny. The insurance major has invested in seven of 10 listed companies of the Adani Group. As of December 2022, LIC held 9.14 per cent in Adani Ports; 5.96 per cent in Adani Total Gas; 4.23 per cent in Adani Enterprises; 3.65 per cent in Adani Transmission; and 1.28 per cent in Adani Green Energy.

The issue has also rocked the parliament after the Opposition parties claimed that LIC and SBI’s “overexposure in Adani group stocks” is a major scam. On February 24, the value of shares LIC held in the Adani Group dropped to Rs 29,893.13 crore against a purchase price of Rs 30,127 crore.

The group, after the report was out, said 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.

But following this, the insurance major lost a huge amount following the massive selloff in Adani stocks.

In mid-February, the state-run insurance company lost nearly Rs 50,000 crore on its investments in the Adani group stocks. The combined market value of its investments in seven Adani stocks - Adani Enterprises, Adani Green Energy, Adani Ports and Special Economic Zone, Adani Total Gas, Adani Transmission, Ambuja Cements and ACC - plunged to Rs 33,242 crore as on February 23 from Rs 82,970 crore as on December 31, 2022.

On February 27, shares of Life Insurance Corporation of India hit their 52-week low level of Rs 566 against a previous close of Rs 584.65. The weakness in Adani stocks and deep erosion in market capitalisation (m-cap) got reflected on the LIC counter as well.

The state-run insurance giant recovered its losses on its investment in the Adani Group stocks after shares of the conglomerate rose for the third consecutive session last week.

In the last one month, shares of Adani Ports have risen 25.36 per cent. On Friday, the shares of Adani Ports rose nearly 10 per cent to settle at Rs 684.35 while Adani Green Energy jumped 5 per cent to close at Rs 562.

However, a rally in the Adani stocks following massive investment from a global investment firm has recovered LIC's notional losses. The ten listed Adani Group firms saw their combined market capitalisation climb a whopping Rs 1.73 lakh crore in the past four trading sessions till March 3.

The value of LIC's investment in the embattled group has risen by about Rs 9,000 crore and now stands at Rs 39,068.34 crore, as of March 3.

Also read: 'Rs 3,200 cr loss for LIC so far...': Mahua Moitra targets Centre again as Adani shares slip

Also read: Adani group stocks: LIC notional loss at Rs 50,000 crore in 50 days; here're calculations

Also watch: LIC Chairman On The Adani Investment And The Surge In Quarterly Profits