LIC's investments in Adani Group firms soar notching sharp 70% gain in FY24

LIC’s investments in Adani Group firms soar notching sharp 70% gain in FY24

The Life Insurance Corporation of India (LIC) has seen a staggering 70% surge in its investments in seven Adani Group companies. At the end of FY23, LIC’s investments in Adani Group firms stood at ₹36,089 crore, which has now surged to ₹61,657 crore.

Among the various Adani Group firms in which LIC holds stakes, the most significant appreciation in value occurred in Adani Green and Adani Ports during FY24. Adani Green witnessed an impressive 114% surge, with LIC’s investments rising from ₹1,892 crore at FY23’s end to ₹4,045 crore presently.

Likewise, LIC’s investments in Adani Ports surged 113%, growing from ₹10,727 crore at FY23’s end to ₹22,819 crore today, reflecting a substantial appreciation.

Adani Group companies like Adani Enterprises enhanced the value of LIC’s investment by 83%, while Ambuja Cement gave a 67% return. Adani Group cement major ACC enhanced the value of investments by 48% in FY24. However, the lowest appreciation in LIC’s investments came in companies like Adani Total and Adani Energy with 9% and 8% returns, respectively.

Last year, the investment by India’s insurance behemoth in the Adani Group firms came under intense scrutiny amid a sharp fall in the Gautam Adani-promoted group’s share prices after the release of the Hindenburg Report.

An assessment of how the value of LIC’s investments in Adani Group companies has fared since hitting the lows following the release of the Hindenburg report reveals interesting trends.

The value of LIC’s investments in Adani Group companies has more than doubled since then, surging from ₹29,024 crore on February 27, 2023, to ₹61,657 crore today. Most notably, LIC investments in Adani Green, Adani Enterprises, and Adani Ports have seen increases of 308%, 169%, and 139% respectively.

In Adani Green, the value of LIC’s investment dropped to ₹992 crore but has now risen to ₹4,045 crore. Similarly, for Adani Enterprises, LIC’s investment value fell to ₹5,345 crore but has now climbed up to ₹14,374 crore. Similarly, for Adani Ports, the value of LIC’s investments moved from ₹9,541 crore on February 27, 2023 to ₹22,819 crore today.

With the significant gains witnessed in LIC’s value of investments in Adani Group companies, this value is just about 20% below its pre-Hindenburg incident levels. The value of investments made by LIC in these seven Adani Group companies was ₹77,881 crore on December 31, 2022. The investment value of LIC in stocks such as Adani Ports, Ambuja Cement and ACC has already surpassed its December 2022 levels.

It is pertinent to note that LIC trimmed its stake in some of these Adani Group companies in FY24. LIC trimmed its stake by 1.26% in Adani Ports, 0.33% in Adani Enterprises and 0.61% in Ambuja Cement in FY24.