LIC increases its stake in the scandal-plagued Adani Group during the March quarter

Despite a 50-80% drop in share prices, Life Insurance Corporation of India (LIC) increased its stake in four Adani companies during the March 2023 quarter: Adani Green Energy (AGEL), Adani Total Gas (ATGL), Adani Enterprises (AEL), and Adani Transmission (ATL). Even though the increase is minor, it comes during a quarter in which US-based short-seller Hindenburg Research published a damning report and LIC’s massive exposure to Adani firms became a talking point. The state-run insurer increased its stake in Adani Green Energy and Adani Total Gas, the two Adani stocks that lost the most value after Hindenburg accused the port-to-power conglomerate of stock price manipulation. According to Trendlyne exchange data, LIC owned 1.36 percent of AGEL at the end of the March 2023 quarter. This was an increase of 8 basis points (bps) over the 1.28 percent stake as of December 31, 2022. LIC’s stake in ATGL increased by 6 basis points to 6.02 percent in the March quarter, up from 5.96 percent at the end of the December quarter. LIC’s stake in AEL and ATL increased by 3 basis points each time. As of March 31, the country’s largest institutional investor-owned 4.26 percent of AEL, up from 4.23 percent in the previous quarter. LIC increased its stake in ATL to 3.68 percent from 3.65 percent during the three-month period.

The LIC stake in ACC remained unchanged at 6.41 percent. It did, however, reduce its stake in Ambuja Cements from 6.33 percent in December 2022 to 6.305 percent in March 2023. LIC’s stake in Adani Ports and Special Economic Zone fell from 9.14 percent to 9.12 percent. It is unknown whether the share transactions occurred before or after the January 24, 2023 release of the Hindenburg report. Within a month of the report, LIC’s investment value in Adani firms had plummeted by nearly Rs 50,000 crore, and the return had turned negative for a brief period. At the end of January 2023, LIC’s investment in Adani Group firms stood at Rs 30,127 crore. Congress leader Rahul Gandhi and TMC leader Mahua Moitra have both criticised LIC’s high exposure to Adani stocks.