Hindenburg rout: LIC’s ₹30,000 crore investment in Adani stocks in a loss

Led by the heavy sell-off in Adani Group stocks, state-run insurance giant Life Insurance Corporation of India’s (LIC) investments made in the group companies have turned negative as its investment value in the listed group stocks stood at nearly ₹27,000 crore, as of closing on February 23, as per data analysed from stake held by the insurance firm as per the December shareholding pattern available on the exchanges.

After the release of the Hindenburg report, LIC on January 30 had stated it has ₹35,917 crore under equity and debt at the end of December in Adani Group stocks. It said the total purchase value of equity under all Adani group companies is ₹30,127 crore and the market value for the same on January 27, 2023 was 56,142 crore.

The combined market value of the 10 listed companies in the group has slumped by $146 billion, or about 60%, since the US-based short seller Hindenburg released its report a month ago, alleging accounting fraud and stock manipulation. Adani has denied the allegations.

With Thursday’s fall, the value of LIC’s investments has turned negative i.e., a loss on its investments. Do note that the assumption is that LIC has not bought or sold stake in the Group companies since January 30.

LIC holdings in Adani Group companies –

In the flagship Adani Enterprises Ltd, LIC holds 4,81,74,654 shares, which is 4.23% of total paid up capital of the company as of December 2022. The insurance giant 9.14% stake in Adani Ports, 3.65% stake in Adani Transmission, 1.28% stake in Adani Green, and 5.96% stake in Adani Total Gas as of December. The total assets under management (AUM) by LIC were over ₹41.66 lakh crore as at September 30, 2022.

The fallout in the stocks has led to sharp erosion in Gautam Adani’s wealth which stands at $42.7 billion, as per the Bloomberg Billionaires index. He has slipped to 29th spot in the world’s richest list, falling from the ranks of world’s second richest last year. Gautam Adani is the founder of conglomerate Ahmedabad-based Adani Group. The group’s interests span infrastructure, commodities, power generation, transmission, real estate and cement.

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