Due to the significant decline in the value of Adani Group stocks, the investments made by Life Insurance Corporation of India (LIC) in the listed group companies have turned negative.
As of February 23, LIC’s investment value in the listed group stocks was approximately INR 27,000 crore, according to data analysed by the stake held by the insurance firm based on the December shareholding pattern available on the exchanges.
LIC had stated on January 30 that it had INR 35,917 crore under equity and debt at the end of December in Adani Group stocks. The total purchase value of equity under all Adani group companies was INR 30,127 crore, and the market value for the same on January 27, 2023, was INR 56,142 crore.
The combined market value of the 10 listed companies in the group has decreased by approximately $146 billion, or about 60%, since the release of the Hindenburg report, which alleged accounting fraud and stock manipulation, a month ago. Adani Group has denied the allegations.
The impact on LIC’s investments in the Adani Group highlights the risks associated with investing in individual companies or sectors. The decline in the market value of Adani Group stocks underscores the importance of conducting thorough research and analysis before investing in any company or sector to mitigate potential risks and minimise losses.
The situation also underscores the importance of diversification in investments, as having a well-diversified portfolio can help mitigate the impact of losses in individual companies or sectors.
As of Thursday’s decline in Adani Group stocks, Life Insurance Corporation of India’s (LIC) investments in the listed group companies has resulted in a loss. It should be noted that this assumption is based on the fact that LIC has not sold or purchased any stake in the group companies since January 30.
What is the total investment of LIC in Adani Enterprises?
LIC holds 4.23% of the total paid-up capital of Adani Enterprises Ltd, which amounts to 4,81,74,654 shares as of December 2022. Additionally, the insurance giant holds a 9.14% stake in Adani Ports, a 3.65% stake in Adani Transmission, a 1.28% stake in Adani Green, and a 5.96% stake in Adani Total Gas as of December.
As of September 30, 2022, LIC’s total assets under management (AUM) were over INR 41.66 lakh crore.
The decline in Adani Group stocks has resulted in a significant reduction in Gautam Adani’s wealth. According to the Bloomberg Billionaires Index, his wealth now stands at $42.7 billion, and he has slipped to the 29th spot in the world’s richest list, down from being the world’s second richest person last year.
Gautam Adani is the founder of the Ahmedabad-based Adani Group, which has interests spanning across infrastructure, commodities, power generation, transmission, real estate, and cement.
