The government informed Parliament on Tuesday that the state-owned Life Insurance Corporation of India (LIC) owns less than 1% of both equity and debt in the Adani Group.
The opposition has cornered the government over the State Bank of India and LIC’s exposure to the Adani Group. After US-based short seller Hindenburg Research accused the group in January of “brazen stock manipulation” and “accounting fraud” through “a vast labyrinth of offshore shell entities,” the group’s listed firms’ share prices plummeted.
Opposition parties have disrupted parliamentary proceedings to demand an investigation into the allegations.
Union minister of state for finance Bhagwat Karad stated in a written reply in Rajya Sabha on Tuesday that the total purchase value of equity under the Adani Group companies was Rs 30,127 crore. He added that the market value at the end of market hours on January 27 was 56,142 crores. “Furthermore, LIC’s total Assets Under Management (AUM) are more than Rs. 41.66 lakh crore as of 30.09.2022. As a result, LIC’s exposure in the Adani group is currently 0.975% of LIC’s total AUM at book value.”
Karad provided the information in response to questions from Bharatiya Janata Party member Sushil Kumar Modi about LIC’s stake in the Adani Group.
According to Karad, LIC has confirmed the majority of its investment information is publicly available. He was responding to a specific question about whether LIC had reduced its stake in Adani Ports by 2% in the previous three years.
“…LIC has informed that all LIC investments are carried out strictly following the statutory framework of the Insurance Act, 1938, and the IRDA Investment Regulations, 2016, and guided by a detailed governance mechanism,” Karad stated.
The report caused the share prices of the Adani Group’s publicly traded companies to fall. It accused the conglomerate of using tax havens improperly and of stock manipulation. The report expressed concern about the organization’s high debt levels.
Adani Group companies were hammered on the stock market on February 1. Its companies lost more than 28% of their value in a single day. Later, the company abruptly canceled its 20,000 crores follow-on public offering, the largest in India.
