LIC Chairman M R Kumar Says Adani Investments ‘In Green’, No Plan To Exit The Stocks

Life Insurance Corporation of India (LIC) chairman M R Kumar said that LIC’s investment in Adani stocks remains “in green” and his team will meet the Adani Group top management soon.

Speaking at the earnings conference on Thursday, he said, “though our investor team has already sought clarifications from the Adanis, our top management couldn’t contact them as yet as we have been busy preparing the results.”

He went on to add that they will meet the Adani top management to “understand what is going on in the market and in the group”. Kumar, however, refused to give a timeline on the same.

LIC, India’s largest institutional investor, is the second largest shareholder in most of the listed Adani group companies. Its total investment in the Adani group stands at Rs 36,474.8 crore as of 27 January, which is 4.23 per cent of the total public holding in those companies.

This means cumulatively LIC owns only 4.23 per cent of Adani group’s shares. However, this is only 0.97 per cent of LIC’s total Rs 44.76 lakh crore ($500 billion) assets under management, keeping it well under the insurance regulator IRDAI’s norms.

The chairman added, “Our investments are still in the green and we have not made any provisions either for equity, which is the vast majority or for the debt.”

He said that the Insurance Regulatory and Development Authority of India investment norms caps it at 15 per cent of a company’s equity, but “we have some exception wherein we hold more than 30 per cent in some companies.”

“Some of the group companies (ACC and Ambuja Cements – which Adani group bought later) our investments go back more than two decades, why should we sell now?” he added further.

LIC had previously issued a public statement that stated that the purchase value of shares in Adani group companies was Rs 30,217 crore and the market value of the same on 27 January was Rs 56,142 crore.

LIC had also invested Rs 300 crore in the follow-on public offer (FPO) of the Adani enterprises as an anchor investor.