Insurance giant LIC recoupes losses as shares of Adani Group rise for a third consecutive month

Insurance giant Life Insurance Corporation of India (LIC) has recouped losses on its investment in the energy-to-airport conglomerate as shares of Gautam Adani-led group companies rose for a third straight month.

LIC holds shares in seven of the ten listed companies in the Adani Group. According to the stock exchange, the stake ranges from 1.28 percent in Adani Green Energy Ltd to 9.14 percent in Adani Ports & SEZ Ltd.

The router in the Adani group Stocks that followed US short seller Hindenburg Research, which issued a damning report on Jan. 24, caused LIC’s investments to turn negative a week ago.

Also Read: Foreign Investors May Contact Markets Authority to Request Review of Expanded Rules After Adani Defeat

At a purchase price of Rs.30,127 crore, the value of shares held by LIC in Adani Group fell to Rs.29,893.13 crore on Feb. 24.

But Adani Group’s stock rally after investors put money into it has reversed the situation.

Also read: Hindenburg Report Consequences: ICRA Revise Adani Ports Outlook, SEZ to Negative; the monitoring group’s ability to raise funds

The value of LIC’s holding in Adani Group shares has since risen by around Rs 9,000 crore, standing at Rs 39,068.34 crore as of Friday’s close, as available on stock exchanges.

The fall in Adani Group shares led some to question LIC’s investment decision.

In a statement on Jan. 30, LIC said that its total equity and debt holdings as of Dec. 31, 2022 were Rs 35,917.31 crore under Adani group of companies.

The market value for the investment at the close of market hours on 27th January 2023 was Rs 56,142 crore, exceeding the investments over time, making the investments profitable.

Also read: The Supreme Court sets up a 6-member committee to investigate the controversy between Adani and Hindenburg

LIC shares have seen hammering since Hindenburg published a research report accusing Adani Group of fraud and stock manipulation. However, the recent surge in Adani Group shares has supported LIC’s share price as it has grown over 2 percent in the last month.

On the contrary, LIC shares have fallen nearly 30 per cent since listing in May 2022, closing over 2 per cent higher on the NSE at Rs.614.5 per share.

With PTI inputs