Adani group stocks: LIC notional loss at nearly Rs 50,000 crore in 2023; here’re calculations
Life Insurance Corporation of India (LIC), the biggest domestic institutional investor, has witnessed an enormous notional loss of Rs 49,728 crore on its investments in the Adani group stocks. The combined market value of LIC’s investments in seven Adani stocks namely Adani Enterprises, Adani Green Energy, Adani Ports and Special Economic Zone, Adani Total Gas, Adani Transmission, Ambuja Cements and ACC plunged to Rs 33,242 crore as on February 23 from Rs 82,970 crore as on December 31, 2022.
The above calculations are based on the difference between the market value of Adani shares as of December 31, 2022 and their current market value. LIC’ total equity asset under management (AUM) stood at Rs 10.91 lakh crore as of December 31, 2022.
Shares of 10-listed Adani group companies took a hit after the US short-seller Hindenburg Research on January 24, 2023 made serious allegations including accounting fraud and stock manipulations on the Adani group.
On an year-to-date (YTD) basis, shares of Adani Total Gas have plummeted the most, by 78.50 per cent till Thursday. It has been followed by Adani Green Energy (down 73.50 per cent), Adani Transmission (down 71.10 per cent), Adani Enterprises (down 64.10 per cent), Adani Power (down 48.40 per cent) and New Delhi Television (down 41.80 per cent).
Other Adani group stocks including Adani Wilmar, Ambuja Cements, Adani Ports & Special Economic Zone and ACC also declined anywhere between 28 per cent and 40 per cent YTD.
Earlier on January 30, the insurance behemoth in a regulatory filing said that the market value of its holding in the Adani Group companies stood at Rs 56,142 crore on January 27 against the total purchase value of equity of Rs 30,127 crore. The total amount invested under the Adani group amounted to Rs 36,474.78 crore as on January 30. Overall, the combined market capitalisation of Adani group has declined by more than Rs 12 lakh crore in the ongoing calendar year till date.
In an interaction with Business Today TV, Sunil Damania, Chief Investment Officer, MarketsMojo said, “I don’t think LIC would have sold any Adani stocks amid the ongoing sell-off. The value of LIC has fallen due to fluctuation in the price of Adani stocks. I feel LIC could have bought more Adani stocks in this falling market. However, this data is not available in the public domain at this point in time.”
“Going with the history, it seems that the Adani group may continue to underperform in the foreseeable future,” Damania said.
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