Life Insurance Corporation (LIC) of India is not immediately planning to invest more in Adani Group companies despite the stocks being available at relatively much cheaper prices now.
The largest domestic institutional investor in India had subscribed to the Adani Enterprises follow on public offer (FPO) at the upper band of the price. The stock is now available at about 40 percent cheaper.
“We are not thinking of doing anything,” said M R Kumar, Chairman, LIC, talking to CNBC-TV18.
The insurance behemoth also clarified that the stock price has taken a hit in a very short time, and it was not suitable to take a call if the Adani stocks needed to be offloaded or any other action is required with regard to its holdings in Adani Group stocks.
“This is too short a period to take a call on whether I have to take a call,” said Kumar.
LIC has invested a total of Rs 30,127 crore in Adani Group companies in the last several years, according to a disclosure made by the government in parliament. As of now, its investments are yielding positive returns.
In the last three weeks, Adani Group stocks took a beating following the scathing report by a US-based short seller. That led to a series of allegations and counter-allegations between the short seller and Adani Group. The latter also had to cancel the FPO due to extreme price volatility despite FPO being fully subscribed.
Kumar assured us that battering in Adani stocks and poor market performance will not hurt the embedded value of LIC negatively.