LIC’s Adani Investments: A Lucrative Affair

When Hindenburg in Last year published a short report on the Conglomerate, the shares of the majority of its companies touched 52-week lows. The insurance giant faced intense scrutiny over its decision to invest in the Adani group after allegations of stock manipulation fuelled by the Hindenburg report.

LIC’s Investment Value Jump

Though after such hammering of Adani group stocks due to the report of Hindenburg last year, The value of LIC’s investment in seven Adani group companies has soared from Rs.38,471 crore as of March 31, 2023, to Rs.61,210 crore on March 31, 2024, registering an increase of Rs.22,378 crore, according to stock exchange data.

The value of LIC’s investment in Adani Enterprise Ltd soared from Rs 8,495.31 crore as on March 31, 2023, to Rs.14,305.53 crore a year later, In Adani Ports and SEZ rose from Rs. 12,450.09 crore to Rs.22,776.89 crore as on March 31, 2024, In Adani Green Energy Ltd saw the biggest rise with value more than doubling to Rs 3,937.62 crore in one year.

LIC Stake Reduce

As the domestic investor was facing abundant outside pressure and due to prevailing negative market sentiments at the time, LIC reduced its stake in 2 of the Adani group companies, Adani Ports and Adani Enterprises- only to spectate both surging by a splendid 83% and 69% respectively.

Foreign Investors Benefitted

While the domestic investors faced pressure, Foreign took this as an opportunity, Big giants like the Qatar Investment Authority, Abu Dhabi-based IHC, French giant TotalEnergies, and US-based GQG Investment, collectively poured close to Rs 45,000 crore into Adani stocks.

Recent Profit Booking

LIC, The largest institutional investor in the Adani Group, used the recent upside in the conglomerate’s stocks to book profits. December quarter shareholding pattern shows that LIC pared stakes in Adani Energy Solutions, Adani Enterprises and Adani Ports.

Altogether, LIC sold 3,72,78466 shares of the three Adani companies during the quarter and bought 4,500 shares of Ambuja Cements.

Conclusions: Though after facing a lot of political pressure due to the Hindenburg report and loss in investment value, The insurance giant stayed still and this led to an impressive increment of 59%  in its investment value. The Domestic investor’s investment in the conglomerate had been a Lucrative offer by far.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.