LIC (Life Insurance Corporation of India), a prominent state-owned entity and one of the key investors in the Adani Group, strategically capitalized on the recent surge in the conglomerate’s stock prices during the third quarter (Q3), opting to book profits. The shareholding pattern for the December quarter revealed that LIC downsized its stakes in three major Adani companies – Adani Energy Solutions, Adani Enterprises, and Adani Ports.
In this quarter, LIC divested a total of 37,278,466 shares across the three Adani entities. Interestingly, LIC also made a minor acquisition, purchasing 4,500 shares of Ambuja Cements, as reported by ET.
The backdrop of LIC’s holdings in Adani Group companies became a contentious topic, especially after the Hindenburg controversy that surfaced at the end of January 2023. In response to allegations of political pressure, LIC vehemently denied any such influence, asserting that the market value of its investments in Adani Group stocks stood at Rs 56,142 crore as of January 27th, 2023.
Despite the controversy, LIC’s holdings in Adani Group witnessed growth, reaching Rs 58,374 crore by the end of the December 2023 quarter, compared to Rs 45,025 crore at the close of September 2023.
Breaking down LIC’s stake in each Adani company provides insight into their strategic moves:
- Adani Energy Solutions: LIC trimmed its stake from 3.68% in the September quarter to 3% in Q3, even as the stock witnessed an impressive 42% increase.
- Adani Enterprises: LIC’s ownership in the flagship company of the Adani Group decreased from 4.23% to 3.93% quarter-on-quarter, despite the Nifty stock displaying substantial growth of almost 29% in Q3.
- Adani Ports: LIC also decreased its stake in Adani Ports, a significant investment in the Adani Group, from 9.07% in Q2 to 7.86% in Q3. Remarkably, the stock experienced a rally of over 46% during the quarter, with LIC’s stake valued at over Rs 20,000 crore.
While LIC made a small purchase of 4,500 shares of Ambuja Cements during the quarter, its percentage shareholding remained unchanged at 6.29%.
Interestingly, LIC’s stake in other Adani stocks, including ACC, Adani Green Energy, and Adani Total Gas, remained unchanged. Adani Green emerged as the star performer in LIC’s portfolio, registering growth of over 73% in Q3.
Despite LIC’s strategic moves, the Adani vs Hindenburg issue persists, with the Supreme Court rejecting the transfer of the investigation to other agencies. The Securities and Exchange Board of India (SEBI) is actively conducting investigations into the allegations against the Adani Group, having completed 22 out of the 24 investigations.
In conclusion, LIC’s Q3 maneuvers within the Adani Group reflect a calculated approach to capitalize on market dynamics, even amidst the backdrop of a lingering controversy. The evolving scenario involving SEBI investigations adds an additional layer of complexity to the unfolding narrative surrounding one of India’s most influential business conglomerates.