LIC recovers losses as shares of Hindenburg-hit Adani firms jump

State-run Life Insurance Corporation (LIC), which has been facing heat from the opposition for investing in Adani, has recouped losses on its investment in the Adani Group stocks after shares of the conglomerate rose for the third consecutive session on Friday.

The insurance major has invested in seven of 10 listed companies of the Adani Group. It holds 1.28 per cent in Adani Green Energy, 9.14 per cent in Adani Ports & SEZ. In the last one month, shares of Adani Ports have risen 25.36 per cent. On Friday, the shares of Adani Ports rose nearly 10 per cent to settle at Rs 684.35 while Adani Green Energy jumped 5 per cent to close at Rs 562.

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The Adani Group stocks saw a massive decline following a damaging report by US short-seller Hindenburg Research. As the shares of Adani plunged, LIC's investment turned negative. On February 24, the value of shares LIC held in the Adani Group dropped to Rs 29,893.13 crore against a purchase price of Rs 30,127 crore.

However, a rally in the Adani stocks following massive investment from a global investment firm has recovered the insurance major's notional losses. The value of LIC's investment in the embattled group has risen by about Rs 9,000 crore and now stands at Rs 39,068.34 crore, news agency PTI reported citing data on stock exchanges.

At one point in February, the insurance behemoth witnessed an enormous notional loss of nearly Rs 50,000 crore on its investments in the Adani group stocks. The combined market value of its investments in seven Adani stocks - Adani Enterprises, Adani Green Energy, Adani Ports and Special Economic Zone, Adani Total Gas, Adani Transmission, Ambuja Cements and ACC - plunged to Rs 33,242 crore as on February 23 from Rs 82,970 crore as on December 31, 2022.

LIC in a statement on January 30 said its total holding under equity and debt was Rs 35,917.31 crore as on December 31, 2022 under the Adani Group of companies. The market value for the investment at the closing of market hours on January 27, 2023 was Rs 56,142 crore.

In the last few trading sessions, the shares of Adani companies have risen significantly. As per Business Today research, the ten listed Adani Group firms saw their combined market capitalisation climb a whopping Rs 1.73 lakh crore in the past four trading sessions till March 3.

The stocks surged after GQG Partners, a US-based boutique investment firm, bought shares worth Rs 15,446 crore in Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited, Adani Transmission Limited, and Adani Enterprises Ltd, group companies of Adani Group.

This was the first major investment in the troubled Adani Group since the short-seller scathing report sparked a stock rout.

Also read: LIC shares extend fall, slip 3% today to hit 52-week low; here's what analysts say

(With inputs from PTI)