LIC, the government-owned insurance giant, has witnessed a substantial surge in the value of its investments in Adani group companies during the fiscal year 2023-24, following a notable recovery by the conglomerate subsequent to a damaging report from a short seller.
According to data from stock exchanges, the value of LIC's investments in seven Adani group companies has escalated from Rs 38,471 crore as of March 31, 2023, to Rs 61,210 crore on March 31, 2024, marking a noteworthy increase of Rs 22,378 crore.
In the previous year, LIC came under intense scrutiny for its choice to invest in the Adani group amidst a political controversy fueled by allegations of stock manipulation triggered by the Hindenburg report. Despite the accusations, Adani group vehemently denied any misconduct.
Following a significant decline that saw Adani Group's stocks plummet by approximately USD 150 billion at their lowest, the conglomerate has staged an impressive recovery, buoyed by robust profit growth across its diverse portfolio of businesses.
Under political pressure, LIC strategically reduced its exposure to two flagship companies within the group—Adani Ports & SEZ and Adani Enterprises—only to witness a substantial surge in their share prices by 83 percent and 68.4 percent, respectively.
Despite trimming its ownership, LIC's investments experienced a notable 59 percent increase in value in the fiscal year 2023-24, as per stock exchange data.
While domestic investors faced pressure, overseas investors swiftly seized the opportunity, with heavyweights like the Qatar Investment Authority, Abu Dhabi-based IHC, French giant TotalEnergies, and US-based GQG Investment collectively pouring close to Rs 45,000 crore into Adani stocks.
The value of LIC's investment in Adani Enterprise Ltd surged from Rs 8,495.31 crore as of March 31, 2023, to Rs 14,305.53 crore a year later, according to data. Similarly, its investment in Adani Ports and SEZ rose from Rs 12,450.09 crore to Rs 22,776.89 crore as of March 31, 2024. LIC's investment in Adani Green Energy Ltd witnessed the most significant increase, with its value more than doubling to Rs 3,937.62 crore within one year.
The insurer also saw appreciable value growth in its investments in Adani Total Gas Ltd, Ambuja Cements, and ACC.
In the year following the Hindenburg report, Adani has solidified its position as India's premier infrastructure conglomerate, with a strong focus on leading the nation's green energy transition alongside a formidable presence in critical sectors such as airports, ports, data centers, and roads.
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