Since September 2020, four out of the seven listed firms in the Adani Group have seen a considerable increase in the Life Insurance Corporation’s ownership stake.
Details about LIC bets on Adani by investing Rs. 74142 cr in Adani Group
According to the business conglomerate’s filings with stock exchanges, the value of the public sector undertaking’s stake in the seven Adani Group firms as a whole is currently Rs 74,142 crore.
Adani Total Gas saw the largest increase in LIC’s shareholding among the Adani Group companies, going from a stake of less than 1% in September 2020 to 5.77% in September 2022.
Similar to this, LIC’s ownership in Adani Enterprises, the conglomerate’s flagship company, climbed from less than 1% to 4.02%. Its stakes in Adani Green Energy increased from less than 1% to 1.15%, and those in Adani Transmission increased from 2.42% to 3.46%.
The three Adani Group companies—Adani Ports, Adani Power, and Adani Wilmar—in which LIC’s ownership has not dramatically increased
According to Business Standard, the Adani Group is the third-largest organization in which LIC has invested, behind Reliance Industries and the Tata Group.
According to The Morning Context, LIC invested 4.9 times more in the Adani Group over the course of the last two years than mutual funds did in the same stocks. According to reports, the public sector undertaking alone is responsible for 81.7% of domestic institutional investment in five Adani Group stocks.
The government-owned life insurer has been significantly expanding its stakes in Adani stocks without giving any justification, an unnamed business advisor claimed to the publication.
The advisor claimed that “LIC is raising its investments in AEL [Adani Enterprises Limited] every quarter without providing any justification for the value they place on the company.” “In the best interests of policyholders, LIC’s equity investments must be transparent as an insurance business. These investments in Adani shares, in my opinion, violate that rule.
LIC made investments of Rs. 40.99 lakh crore in September. 8.31 lakh crore, or 20.3% of these, were invested in equity shares. In comparison to the prior fiscal year, the insurer saw gains from its equity investments of Rs 42,000 crore in 2021–2022. The Adani Group has recently broadened its business activities beyond coal and ports by foraying into the fields of defense, urban water management, small and medium sector loans, power transmission, airports, data centers, cement, and renewable energy.