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Tuesday, February 27, 2024

Hindenburg-hit Adani’s shares rise: LIC recovers losses

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The gain in Adani Group shares has compensated for the loss of LIC. The Government Insurance Company has made investments in several Adani Group enterprises. Because of Adani Group’s declining share price, LIC was also a focus of the opposition.

Life Insurance Company, a government insurance corporation, has made a significant investment in Adani Group enterprises (LIC). As a result of Adani Group’s declining share price, LIC became a focus of the opposition. The group’s dropping shares impacted LIC’s stock as well. Nonetheless, there was a boom in the insurance company’s shares in the past. LIC recovered its investment losses as Adani Group shares gained for the third straight day on Friday.

The insurance business has invested in seven of Adani Group’s ten publicly traded enterprises. It owns 1.28% of Adani Green Energy and 9.14 percent of Adani Ports.Adani Ports’ shares have increased by 25.36 percent in the last month. Adani Ports’ shares closed at Rs 684.35 on Friday, up over 10%. Whereas Adani Green Energy’s shares rose 5% to end at Rs 562.

After the report by American short-seller Hindenburg Research, Adani Group’s shares plummeted precipitously. The market valuation of group firms fell by 60 to 70%. As Adani’s stock sank, so did LIC’s investment. On February 24, the value of LIC’s shares in Adani Group fell to Rs 29,893.13 crore, down from Rs 30,127 crore at the time of acquisition.

Nevertheless, following the investment of US boutique investment company GQG Partners in Adani Group, the stock had a significant rise, and LIC’s losses were recovered. The insurance company’s investment in Adani Group, which is experiencing financial difficulties, surged by Rs 9,000 crore to Rs 39,068.34 crore.

At one point in February, this massive insurance business had suffered a massive loss of over Rs 50,000 crore on its investment in Adani Group shares. On February 23, the aggregate market value of its holdings in seven Adani equities – Adani Enterprises, Adani Green Energy, Adani Ports and Special Economic Zone, Adani Total Gas, Adani Transmission, Ambuja Cements, and ACC – fell from Rs 82,970 to Rs 33,242 crore.

In a statement issued on 30 January, LIC stated that its entire equity and debt investment in Adani group firms as at 31 December 2022 was Rs 35,917.31 crore. The investment was worth Rs 56,142 crore at the close of business on January 27, 2023. Adani’s company shares have risen dramatically in recent trading sessions. The market valuation of the Adani Group’s listed 10 firms has increased by Rs 1.73 lakh crore.

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