LIC says exposure in Adani Group at 0.975 pc of its total assets under management
LIC shares have been slipping as worries have risen over its exposure to Adani Group
LIC shares have been slipping as worries have risen over its exposure to Adani Group
LIC shares have been slipping as worries have risen over its exposure to Adani Group
LIC shares have been slipping as worries have risen over its exposure to Adani Group
Ever since the US-based short seller Hindenburg released a scathing report on the Adani Group, accusing it of stock manipulation and accounting fraud, shares of the Gautam Adani-led conglomerate have been under selling pressure. On Monday, even as the flagship Adani Enterprises ended 4 per cent higher, several other group companies closed in the red once again.
However, Adani Group companies are not the only ones feeling the heat post the Hindenburg report. Life Insurance Corporation of India, the country’s largest insurer, slipped 1.4 per cent on Monday to close at Rs 656.40. The stock has fallen 6.5 per cent since last Tuesday’s close as worries have risen over its exposure to the Adani Group.
As of the quarter that ended December 2022, LIC held a 4.23 per cent stake in Adani Enterprises. In Adani Ports and Special Economic Zone, its stake is as much as 9.14 per cent. In Adani Transmission, LIC held a 3.65 per cent stake and in Adani Total Gas, it had a 5.96 per cent stake.
LIC, on Monday, tried to allay market worries around this exposure and said its total exposure to the Adani Group is less than 1 per cent of the total assets under management at book value.
“LIC’s total holding under equity and debt is Rs 35,917.31 crore as on 31.12.2022 under Adani Group of companies. The total purchase value of equity, purchased over the last many years, under all the Adani Group companies is Rs 30,127 crore and the market value for the same as at close of market hours on January 27, 2023 was Rs 56,142 crore. The total amount invested under Adani Group amounts to Rs 36,474.78 crore as on date. These investments have however been made over a period,” the life insurer said in a statement.
The total assets under management (AUM) by LIC were over Rs 41.66 lakh crore as at September 30, 2022, it added.
“Therefore, LIC’s exposure in the Adani Group, as on date, is 0.975 per cent of LIC’s total AUM at book value,” it pointed.
LIC, further said the credit rating of all of the Adani debt securities held by LIC are AA and above, which is in compliance with the IRDAI (Insurance Regulatory and Development Authority of India) investment regulations as applicable to all life insurance companies.
It continues to follow a strict investment framework compliant with applicable guidelines and regulations, it said, adding it invests from a long-term perspective based on detailed due diligence.
“LIC follows a robust procedure for valuation of its liabilities and determination of solvency margin in order to ensure its financial soundness on continued basis. The available solvency margin of LIC as at September 2022 was well above the target solvency level of 160 per cent,” said the insurer.
On Monday, shares of Adani Enterprises, which is in the midst of an equity fund raising of up to Rs 20,000 crore, rebounded to close at Rs 2,878.50, up 4.2 per cent on the BSE. The closing price is still lower than the follow on offer price range of Rs 3,112 to Rs 3,276 a share.
Among other Adani Group stocks, Adani Total Gas and Adani Green hit a 20 per cent lower circuit to close at Rs 2,347.65 and Rs 1,187.70. Elsewhere, Adani Ports closed 0.3 per cent down at Rs 596.85, Adani Wilmar was 5 per cent lower at Rs 491.45, Adani Power also fell 5 per cent to Rs 235.65 and Adani Transmission was down 14.9 per cent to Rs 1,710.10. Cement companies Ambuja and ACC, which Adani Group had acquired from Holcim Group last year, higher by more than 1 per cent.
The BSE Sensex closed 169.5 points or 0.3 per cent higher at 59,500.41 level.
However, Adani Group companies are not the only ones feeling the heat post the Hindenburg report. Life Insurance Corporation of India, the country’s largest insurer, slipped 1.4 per cent on Monday to close at Rs 656.40. The stock has fallen 6.5 per cent since last Tuesday’s close as worries have risen over its exposure to the Adani Group.
As of the quarter that ended December 2022, LIC held a 4.23 per cent stake in Adani Enterprises. In Adani Ports and Special Economic Zone, its stake is as much as 9.14 per cent. In Adani Transmission, LIC held a 3.65 per cent stake and in Adani Total Gas, it had a 5.96 per cent stake.
LIC, on Monday, tried to allay market worries around this exposure and said its total exposure to the Adani Group is less than 1 per cent of the total assets under management at book value.
“LIC’s total holding under equity and debt is Rs 35,917.31 crore as on 31.12.2022 under Adani Group of companies. The total purchase value of equity, purchased over the last many years, under all the Adani Group companies is Rs 30,127 crore and the market value for the same as at close of market hours on January 27, 2023 was Rs 56,142 crore. The total amount invested under Adani Group amounts to Rs 36,474.78 crore as on date. These investments have however been made over a period,” the life insurer said in a statement.
The total assets under management (AUM) by LIC were over Rs 41.66 lakh crore as at September 30, 2022, it added.
“Therefore, LIC’s exposure in the Adani Group, as on date, is 0.975 per cent of LIC’s total AUM at book value,” it pointed.
LIC, further said the credit rating of all of the Adani debt securities held by LIC are AA and above, which is in compliance with the IRDAI (Insurance Regulatory and Development Authority of India) investment regulations as applicable to all life insurance companies.
It continues to follow a strict investment framework compliant with applicable guidelines and regulations, it said, adding it invests from a long-term perspective based on detailed due diligence.
“LIC follows a robust procedure for valuation of its liabilities and determination of solvency margin in order to ensure its financial soundness on continued basis. The available solvency margin of LIC as at September 2022 was well above the target solvency level of 160 per cent,” said the insurer.
On Monday, shares of Adani Enterprises, which is in the midst of an equity fund raising of up to Rs 20,000 crore, rebounded to close at Rs 2,878.50, up 4.2 per cent on the BSE. The closing price is still lower than the follow on offer price range of Rs 3,112 to Rs 3,276 a share.
Among other Adani Group stocks, Adani Total Gas and Adani Green hit a 20 per cent lower circuit to close at Rs 2,347.65 and Rs 1,187.70. Elsewhere, Adani Ports closed 0.3 per cent down at Rs 596.85, Adani Wilmar was 5 per cent lower at Rs 491.45, Adani Power also fell 5 per cent to Rs 235.65 and Adani Transmission was down 14.9 per cent to Rs 1,710.10. Cement companies Ambuja and ACC, which Adani Group had acquired from Holcim Group last year, higher by more than 1 per cent.
The BSE Sensex closed 169.5 points or 0.3 per cent higher at 59,500.41 level.