LIC’s Shareholders, Customers Need Not Worry About Gutam Adani’s Exposure

LIC’s Shareholders, Customers Need Not Worry About Gutam Adani’s Exposure

February 2023: Shareholders and customers of state-run Life Insurance Corp (LIC) should not worry about its exposure to the Adani group, as the insurer is a diversified long-term investor, a top government official told Reuters.

Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey said LIC “has released information that its exposure to Adani Group companies should not be of concern to shareholders and policyholders.”

“LIC has a well-diversified portfolio and has investments in many companies and the value of its investments fluctuates. LIC is a long-term investor in the market.”

LIC holds a 4.23% stake in the flagship Adani firm, while its other exposures include 9.14% in Adani Ports and 5.96% in Adani Total Gas.

Both houses of India’s parliament were adjourned on Friday amid chaotic scenes as some lawmakers demanded an investigation into billionaire Gautam Adani‘s stock market turmoil in group companies, which some fear could lead to a wider financial turmoil.

Shares of Adani group companies have lost nearly half their market value – or more than $100 billion – since US short-seller Hindenburg Research last week accused the group of stock manipulation and unsustainable debt.

The Adani group rejects the criticism and denies wrongdoing.

Sale of shares

Pandey also said the government does not plan to sell more of its stake in LIC in the fiscal year starting in April.

LIC shares have fallen by more than 30% since listing in May last year. The government has reduced the revenue target from the sale of shares in state-owned companies to 500 billion rupees ($6.1 billion) from 650 billion. It aims to raise Rs 510 billion in 2023/24.

Pandey said he planned to list state-run Indian Renewable Energy Development Agency and government-owned water and power consultancy agency WAPCOS.

The government is in the process of selling a majority stake in IDBI Bank, the first sale of a bank in India through a bidding process. The government has allowed tax exemption if another bank buys IDBI Bank. “Every investor wants clarity on tax laws,” Pandey said.

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