The phenomenal rally in Adani group stocks over the past one year has grabbed attention of the largest domestic institutional investor — Life Insurance Corporation of India (LIC) even as foreign portfolio investors (FPIs) preferred to cash out.

The shareholding pattern data for September 2022 of the seven listed Adani group companies showed LIC increased its holding in four — Adani Enterprises, Adani Green Energy, Adani Total Gas and Adani Transmission, while it reduced its stake in Adani Ports and SEZ both q-o-q and y-o-y.

However, LIC doesn’t have a reportable investment in Adani Power and Adani Wilmar (AWL). LIC’s stake in AEL jumped to 4.02 per cent from 2.22 per cent year-on-year; in Adani Total Gas, LIC hiked its holding to 5.77 per cent (3.58 per cent), and 3.46 per cent (2.42 per cent) in Adani Transmission.

In contrast, FPIs reduced their holding in AEL to 15.25 per cent (17.83 per cent), AGEL to 15.25 per cent (17.83 per cent) and Adani Total Gas to 17.44 per cent (18.89 per cent). But Adani Power seems to be their favourite, as they added 2 percentage points in the company to 13.23 per cent (11.14 per cent).

Long-term vision

Market sources said that LIC is seen betting big on the growth projections laid down by the group chairman Gautam Adani. “We don’t see significant investments by other DIIs. But LIC seems to be holding Adani Group stocks with a long-term vision,” said a research analyst working with a Mumbai-based brokerage.

Also, this isn’t the first time that LIC has hiked its stakes in the Adani Group stocks. During September 2014 to June 2015, LIC hiked its stake in APSEZ from 1.45 per cent to 3.41 per cent. “Like any other investor, LIC also looks at a promising valuation and books profit when there is an opportunity. LIC now holds stakes in most of the Adani Group companies, which means they are going bullish over the group’s business plans,” said another analyst tracking LIC investments.

Notably, the group stocks have witnessed sharp rally between September 2021 and September 2022. On the closing date of the quarter, AEL shares have shown 136 per cent gains. APL gained 280 per cent, followed by ATGL (137 per cent), ATL (119 per cent), AGEL (75 per cent) and APSEZ the least gains of 11 per cent during the year.

The latest entrants — Ambuja Cements and ACC — into Adani Group witnessed mixed trend with the former seeing status quo in LIC stake quarter-on-quarter, while the latter saw marginal accumulation to 6.33 per cent (6.14 per cent).