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Adani, Gautam

LIC Denies Allegations of Orchestrated Investment in Adani Group

Strategic Insights

— 2 min read

The Life Insurance Corporation of India (LIC) has responded to a report in The Washington Post, which alleged that officials orchestrated a plan to steer the insurer into investing in the Adani group. The report claimed that a plan was made to invest in the Adani group when the company was facing a debt pile and scrutiny in the US. However, LIC has denied these allegations, stating that its investment decisions are made independently and in accordance with its board-approved policies. LIC has ensured the highest standards of due diligence in its investment decisions, which have been undertaken in compliance with extant policies, provisions in the Acts, and regulatory guidelines, in the best interest of all its stakeholders.

Key Takeaways:

  • LIC has maintained that its investments in Adani group companies have been made independently and in accordance with its board-approved policies, following detailed due diligence.
  • The Department of Financial Services or any other body does not have any role in LIC's investment decisions.
  • LIC has an exposure to the Adani group that is less than 2 per cent of the conglomerate's total debt.
  • Global investors, including BlackRock, Apollo, and Mizuho, have also invested in Adani debt in recent months.
  • Adani's total debt of ₹2.6 lakh crore is backed by ₹90,000 crore in annual operating profit and ₹60,000 crore in cash.
  • LIC owns a 4 per cent stake in Adani stocks, valued at ₹60,000 crore, which is lower than its stakes in Reliance, ITC, and the Tata Group.
  • LIC has invested in 351 publicly listed stocks, spanning virtually every major business group and sector, with a total asset value of over ₹41 lakh crore.

Statistics:

  • LIC's investments in Adani group companies have grown 10-fold since 2014, from 1.56 lakh crore to ₹15.6 lakh crore.
  • LIC's exposure to the Adani group is less than 2 per cent of the conglomerate's total debt.
  • Adani's total debt of ₹2.6 lakh crore is backed by ₹90,000 crore in annual operating profit and ₹60,000 crore in cash.
  • LIC owns a 4 per cent stake in Adani stocks, valued at ₹60,000 crore.
  • LIC has invested in 351 publicly listed stocks, spanning virtually every major business group and sector, with a total asset value of over ₹41 lakh crore.
  • Reliance Industries Ltd. is LIC's largest equity holding, with a 6.94 per cent stake worth ₹1.33 lakh crore.

Sources:

  • The Washington Post
  • Life Insurance Corporation of India (LIC)
  • Department of Financial Services
  • Published by HT Digital Content Services with permission from Pioneer

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