LIC is making 45% profit on Adani investment

Even though the Hindenburg report had deteriorated the value of LIC holdings in the Adani Group stocks, the investments are on the recovery mode since the release of the Supreme Court-appointed committee's report on SEBI investigations on the Adani group.

As per Fortune India's calculation, the combined investment holding of LIC was ₹81,347 crore on the eve of January 23, 2023, a day prior to the Hindenburg expose, which reduced to ₹45,481 crore as on May 23, 2023 (closing price).

The current value of LIC holdings, which is now 45% more than its purchasing price, comes as a zephyr of hope for investors. For the past several years, the life insurer has been investing in Adani Group companies. In these years, it has bought shares worth around ₹31,200 crore in seven Adani Group companies. In the absence of data related to the purchasing price of each company, Fortune India could not ascertain the profit and loss, LIC made on each of its investments in the group companies.

Between Hindenburg's expose on January 24 and May 23, the life insurer suffered the maximum notional loss on its investment in Adani Total Gas where its holding value reduced from ₹25,525 crore to ₹5,021 crore or a reduction of 80.33%.

In Adani Transmission, LIC's investment value reduced from ₹11,235 crore to ₹3,566 crore or 68.25% notional loss between Hindenburg Expose and May 23. This is the second biggest notional loss in the holding Value of LIC in the group companies.

In the flagship company Adani Enterprises, LIC's investment value reduced from ₹16,582 crore to ₹12,782 crore, a 23% reduction in the last four months.

In Adani Port and SEZ, LIC is making the least loss where its investment value came down from ₹15,036 crore to ₹14,463 crore or a notional loss of 3.8%.

In the two cement companies namely ACC and Ambuja Cement, the notional loss is 22% and 14.8%, respectively. Investment value in ACC has gone down from ₹2,811 crore to ₹2,189 crore while in Ambuja Cement it went down to ₹5,337 crore from ₹6,266 crore between Hindenburg expose and May 23.

LIC's investment in Adani Green came down to ₹2,123 crore from ₹3,893 crore or a notional loss of 45.46%.

LIC owns 19.75 crore and 4.8 crore shares in Adani Ports and Adani Enterprises. Also, the life insurer owns 4.06 crore, 2.03 crore, 6.55 crore in Adani Transmission, Adani Green and Adani Total Gas respectively. In cement companies Ambuja and ACC, LIC holds 12.55 crore and 1.20 crore shares respectively.

Although LIC's Investment in the Adani group is still 44% lower than what it was before the release of the Hindenburg report, the notional loss appears to be shrinking, much to the relief of investors.