LIC notches big gain on Adani investment as stocks rally

Driven by two days of strong rally in Adani Group stocks, Life Insurance Corporation (LIC) of India, the country’s largest life insurer, has seen significant growth in its portfolio. The market value of LIC's investment in billionaire Gautam Adani-led conglomerate crossed ₹45,000 crore on May 23, thanks to the uptrend in group shares. The calculation was based on the insurer’s holding in Adani Group companies as of the March quarter and Tuesday’s close price of stocks on the BSE.

The data showed that the market value of LIC’s stake in Adani stocks soared by more than ₹9,600 crore in less than two months, from ₹38,846 crore on March 31 to ₹45,481 crore as on May 23. At the end of the December 2022 quarter, the value was ₹82,970 crore, which fell sharply in February after Hindenburg Research’s allegations of 'corporate misgovernance' and 'stock price manipulation'.

Of 10 listed Adani Group companies, the PSU major holds stakes in 7 entities — Adani Enterprises, Adani Transmission, Adani Ports, Adani Green Energy, Adani Total Gas, ACC and Ambuja Cement. Exchange data shows that LIC owns 51.12 crore shares spread across seven Adani companies. At the end of March quarter, LIC’s holding in Adani Group stocks was similar to the December period and did not see any meaningful changes. It is not public yet if LIC bought more shares after March.

As per BSE data, LIC’s maximum exposure was in Adani Ports & SEZ at 9.12%, followed by 6.41% and 6.29% in newly acquired cement entities, ACC and Ambuja Cements, respectively. Among others, the state-owned insurer owns 6.02% shares in Adani Total Gas, 4.25% in Adani Enterprises, 3.68% in Adani Transmission, and 1.35% in Adani Green Energy.

Adani shares got a boost this week after the Supreme Court-constituted committee concluded that there was no regulatory failure on the allegations of stock price manipulation. The Gujarat-based conglomerate registered its biggest single-day gains in the calendar year 2023 on Monday, with Adani Enterprises climbing nearly 19%. In the first two days of this week, the combined market valuation of the ten listed Adani Group firms increased by 1.45 lakh crore to ₹10,79,498 crore on May 23 from ₹9,34,485 crore at the close of trade on May 19.

The sentiment was further lifted after veteran investor Rajiv Jain-led GQG Partners reportedly raised its stake in Adani Group by about 10%, valued at around $3.5 billion. In March this year, Jain, the co-founder and chairman of GQG Partners, acquired minority stakes in four of the listed Adani Group companies for ₹15,446 crore. Listed on the Australian Stock Exchange, GQG Partners had acquired stakes in flagship firm Adani Enterprises Limited (AEL), Adani Ports and Special Economic Zone Limited (APSEZ), Adani Green Energy Limited (AGEL), and Adani Transmission (ATL).

Meanwhile, Adani stocks ended mostly lower on Wednesday, in sync with the broader market, as investors took some breather after recent rally. The flagship firm Adani Enterprises and Adani Wilmar fell up to 6%, while Adani Total Gas and Adani Transmission hit their respective 5% upper circuit limit for the third straight day.

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