LIC chairman M R Kumar said that fluctuations in Adani Group stocks’ prices would not impact the corporation’s bottom line, and that the market value of LIC’s investment in Adani shares is considerably higher than their book value. Kumar added that no provisioning was required in respect of Adani companies as the debt is a ‘standard asset’. LIC makes provisions for diminution in the equity value on a portfolio basis and not for individual stocks, he said.
The chairman said that the corporation did not have plans to sell its stake in Adani Group companies. “At least two of the group companies, in which we were invested for decades, were later acquired by Adani Group. If some foreign or sovereign funds are exiting, that is how they do their business. We buy and hold for the long term. Why should we be selling ACC & Ambuja now?” said Kumar.
LIC had earlier sought a meeting with Adani Group in the wake of the rout in share prices. Kumar confirmed that LIC had sought a meeting but said there was no timeline. “We want to understand what’s happening in the markets, why it is happening, and if they can throw some light on it. We want to know their business profile, what they are planning to do and how they will manage,” said Kumar.
Kumar reiterated that LIC’s exposure to Adani Group is 0.97% of its total assets under management, and its exposure to the group is Rs 35,917 crore. The book value of LIC’s investment in equities is around Rs 6.9 lakh crore, and the book value of the investment in Adani Group is just 4.2% of that figure.
Kumar said that LIC’s investment in Adani Group companies is well within limits prescribed by the insurance regulator.
