LIC has invested Rs 30,127 cr in Adani group: Govt

State-run Life Insurance Corporation of India (LIC) has invested Rs 30,127 crore “over the last many years” to purchase equity stakes in various Adani group companies, Union Minister of State for Finance Bhagwat Kisanrao Karad informed the Parliament on Tuesday.

Share prices of Adani group companies have crashed in the past two weeks following US-based short-seller Hindenburg Research’s report accusing Gautam Adani-led firms of accounting fraud and stock manipulation. Erosion in the value of LIC’s equity holding in Adani group companies has become a big political issue resulting in disruptions in the parliament.

In a reply to a question in the Rajya Sabha, Karad said LIC’s total holding in Adani group companies, equity and debt put together, stood at Rs 35,917.31 crore as on December 31, 2022.

“Total purchase value of equity, purchased over the last many years, under all the Adani group companies is Rs 30,127 crores and the market value for the same as at close of market hours on 27.01.2023 was Rs 56,142 crore,” the minister said.

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Share price of Adani group companies that include Adani Enterprises, Adani Ports and Special Economic Zone, Adani Power, Adani Transmission, Adani Green Energy, Adani Total Gas and Adani Wilmar, has slumped after January 27. So, it is not clear whether LIC is still sitting on profit on its equity investment in Adani group companies.

The government claimed that LIC’s exposure to Adani group is less than 1% of the state-run insurer’s total assets under management (AUM) at book value. LIC’s total AUM stood at Rs 41.66 lakh crore as on September 30, 2022.

Meanwhile, Fitch Ratings said the commercial banks’ exposure to Adani group would not pose a substantial risk to credit profiles of the lenders.

“Fitch Ratings believes that Indian banks' exposure to the Adani group is insufficient in itself to present a substantial risk to the banks' standalone credit profiles,” the rating agency said in a note.