LIC says Adani Group's exposure is less than 1% of total AUM
Jan 30, 2023 05:35 PM | Source: capitalmarket.com
Insurance behemoth Life Insurance Corporation of India (LIC) today said its total exposure in Adani Group companies is 0.975% of its total assets under management (AUM) at book value.
As of December-end, LIC said its total holding under equity and debt across Adani companies stood at Rs 35,917.31 crore.
"The total purchase value of equity, purchased over the last many years, under all the Adani group companies is Rs 30,127 crore and the market value for the same as at close of market hours on January 27th, 2023 was Rs 56,142 crore. The total amount invested under Adani Group amounts to Rs 36,474.78 crore as on date. These investments have however been made over a period," LIC said in a statement.
LIC's total AUM as on September 30, 2022 stands at Rs 41.66 lakh crore. Therefore, LIC's exposure to Adani Group, as on today's date, is 0.975% of LIC's total AUM at book value, the PSU said.
"Further it may be appreciated that the credit rating of all of the Adani debt securities held by LIC are AA and above which is in compliance with the IRDAI investment regulations as applicable to all the life insurance companies," LIC said.
The comment from LIC comes after Hindenburg Research published a report warning investors of high leverage in Adani Group companies and also alleged fraudulent practices.
In the last 3 trading sessions, Adani stocks have eroded around Rs 5.5 lakh crore market capitalisation.
Stating that it follows a robust procedure for valuation of its liabilities and determination of solvency margin in order to ensure its financial soundness on continued basis, LIC said it continues to follow strict investment framework compliant with applicable guidelines and regulations.
"It is also important to note that while the market value of assets can change in either direction, LIC invests from a long term perspective and based on detailed due diligence," it said.
In response to Hindenburg's 106-page report, the Gautam Adani-led group has issued a 413-page long response to all 88 questions raised by the US-based research firm. While calling Hindenburg an "unethical short seller", Adani Group said the public lost money but Hindenburg made a windfall gain by doing a calculated securities fraud.