Life Insurance Corporation of India (LIC) said it is sitting on investment gains in Adani Group company stocks.

It said its purchases over the last many years totalled ₹30,127 crore with the current market value at ₹56,142 crore as on January 27.

The state-owned life insurance behemoth’s statement comes in the wake of Adani Group company stocks getting battered after the US-based short-seller Hindenburg Research released a report on January 25alleging manipulationin these stocks, lapses in corporate governance, and financial mismanagementin the Group.

Political hue

Questions were raised on LIC’s exposure to the Adani group with some analysts claiming that the insurance giant continued to invest in these companies despite concerns raised about them earlier.

It had also taken a political colour with the Opposition parties seeking an investigation.

Communist Party of India (Marxist) leader Sitaram Yechury tweeted on January 27 that

“These allegations, if true, will destroy lives of crores of Indians who park life-long savings in LIC & SBI. LIC has ₹74,000 crore in Adani companies & 40 per cent of its borrowings from state-owned banks are through SBI. People’s security must be safeguarded not cronies.”

Credit rating

In a statement, LIC clarified that its total holding of Adani companies equity and debt was ₹ 35,917.31 crore as at December-end 2022.

“The total amount invested under Adani Group amounts to ₹36,474.78 crore as on date. These investments have, however, been made over a period,” the statement said.

LIC pointed out that the credit rating of all the Adani debt securities it held are AA and above which is in compliance with the IRDAI investment regulations as applicable to all life insurance companies.

LIC’s total Assets Under Management (AUM) exceeded ₹41.66-lakh crore as at September 30, 2022.

Therefore, LIC’s exposure to the Adani group, as on date, is 0.975 per cent of its total AUM at book value,” the life insurer said.

It also underscored that while the market value of assets can move in either direction, it invests from a long-term perspective and based on detailed due diligence.

The available solvency margin of LIC as of September 2022 was well above the target level of 160 per cent, it added.

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