How much has India's largest insurer suffered in the Adani fiasco?

Since the publication of the explosive Hindenburg Research report, LIC's stock have plunged nearly 17%
How much has India's largest insurer suffered in the Adani fiasco?
Photo: DADO RUVIC (Reuters)
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Hindenburg Research’s allegations of fraud against the Adani group have scorched the Life Insurance Corporation of India (LIC).

Its holdings in the Adani stocks account for less than 1% of the total equity portfolio of India’s biggest insurer. But that was enough to do the damage.

The US-based financial forensic investigative firm alleged in January that the Gautam Adani-led group had indulged in fraud and stock manipulation. It reported that the group’s seven listed firms were overvalued by more than 85%.

Within a month of the publication of Hindenburg’s report, the share price of Adani Total Gas has fallen by 81%, that of Adani Transmission by 74%, Adani Enterprises by nearly 62%, and Adani Ports by more than 26%.

Exposure to Adani has robbed LIC of its wealth

On Jan. 24, when the report was published, LIC held around $9.8 billion worth of Adani stocks. Since then, the value has plunged by more than $5.9 billion.

LIC’s own stocks have, in this time, fallen 17% to a record low. It suffered its biggest loss in Adani Total Gas’s stock—down from $2.5 billion on Jan. 24 to nearly $604 million. It also lost $1.2 billion in Adani Enterprises and $1 billion in Adani Transmission.

The Adani meltdown is being seen as a key reason for the 40% erosion—$29.02 billion—in LIC’s market capitalization since its listing last May. It isn’t among India’s top-10 large-cap stocks anymore.