Hindenburg Fallout: Value of LIC’s stake in Adani’s shares drops by ₹48,600 crore in a month

According to BSE data, LIC The group’s flagship firm holds 4,81,74,654 equity shares or 4.23% Adani Enterprises, Whereas the state-owned Life Insurance Company holds 4,06,76,207 equity shares or 3.65% in Adani Transmission; 6,55,88,170 equity shares or 5.96% in Adani Total Gas; and 2,03,09,080 equity shares or 1.28% in Adani Green Energy.

LIC also has some stake in Adani’s cement business. The insurer holds 12,55,89,263 equity shares or 6.33% in Ambuja Cements and 1,20,33,271 equity shares or 6.41% in ACC.

But LIC’s largest stake in Adani-related shares will be in Adani Ports. The insurer holds 19,75,26,194 equity shares or 9.14% in Adani Ports.

LIC has no stake in Adani Wilmar, Adani Power and NDTV.

Data is for BSE and up to December 31, 2022.

Taking into account the market value of Adani’s shares as on January 24, the value of LIC’s stake in Adani Enterprises was approximately 16585.33 crores; Adani Ports it was around 15,028.78 crores; It was in Adani Transmission 11,210.97 crores; It was in Adani Total Gas 25,483.96 crores; and was in Adani Green Energy 3,886.24 crores.

While the valuation of LIC’s holding in Ambuja Cements has come close 6,261.25 crores, and around acc. 2,811.21 crores.

Overall, as of January 24, LIC’s holding in Adani’s shares was close to Rs. 81,267.75 crores.

But on the same day, things were about to change drastically for Adani’s group and to the surprise of many. On January 24, Hindenburg dropped a critical report alleging that Gautam Adani’s group had committed fraud, stock manipulation and tax evasion, among other crimes.

Hindenburg’s January 24 report stated, “We reveal the findings of our 2-year investigation, presenting evidence that 17.8 trillion (US$218 billion) Indian conglomerate Adani Group has been engaged in a brazen stock manipulation and accounting fraud scheme for decades.”

The short seller had claimed that the valuation of 7 stocks named Adani is more than 85%.

And then the series of decline in Adani’s shares started. Even after a month, the selling phase in Adani’s shares continues. By the end of February 24, Adani Group’s market value has slipped more than a 12 lakh crores in a month.

Prior to January 24, Adani’s shares together held the market valuation of Alpha Sit on the stock exchanges. 19 lakh crore, surpassing Mukesh Ambani’s Reliance and Ratan Tata’s TCS.

Why was LIC affected by the Adani-Hindenburg row? The answer is simple because LIC has exposure to Adani shares. Although on January 30, LIC had said 35,917 crore under equity and debt at the end of December in Adani Group shares. LIC had said, the total purchase price of equity under all Adani group companies is 30,127 crores.

LIC’s shareholding value in Adani shares at the end of February 24 was around Rs. 32,618.56 crores. So, overall, LIC’s shareholding value in Adani shares declined 48,649.17 cr from 24 Jan to 24 Feb.

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LIC’s biggest loser will be in Adani Total Gas as its shareholding value declines 20,541.23 crores in a month. Its shareholding has declined in value 10,251.57 crore in Adani Enterprises, 3,988.05 crore in Adani Ports, 8,315.23 crore in Adani Transmission, 2,897.69 crore in Adani Green Energy, 1,925.28 crore in Ambuja Cements and by 730.12 cr in acc.

In one month, the share price of Adani Enterprises declined by nearly 62%, Adani Ports by over 26.5%, Adani Transmission by over 74%, Adani Total Gas by nearly 81% has declined by over 74.5%, and Adani Green Energy. The share prices of Ambuja and ACC have also declined by around 31% and 26%.

Read here: A month after Hindenburg’s scathing report, Adani shares fall; the group loses 12 lakh crore m-cap

Meanwhile, LIC’s share price has declined by around 17%. stock was around 702.20 on Jan 24 on BSE at Rs. But the stock declined on February 24 584.65 each.

On Friday, LIC shares fell a little over 1% and its market cap was close to Rs. 3,69,791 crores.

For Adani shares, 7 out of 10 total listed securities were in the red on Friday. Adani Enterprises dropped nearly 5%, while Adani Power was frozen at 5% lower circuit. Adani’s three stocks namely Adani Green Energy, Adani Total Gas and Adani Transmission closed at 52-week low. While Adani Wilmar was down 3.4%, and media arm NDTV stock fell over 4%.

The only stocks in the green were Adani Ports, up over 1.2%, and Ambuja Cements, up 2.5%, while ACC was broadly flat on Friday.