LIC Defies Mutual Fund Trend, Increases Stakes in Adani Group Companies

Life Insurance Corporation (NS: LIFI ) of India (LIC) has been making headlines recently for its investment strategy in the embattled Adani group companies, specifically increasing its stakes in four out of six stocks while trimming holdings marginally for two others.

According to data compiled from BSE and corporate database AceEquity, LIC raised its stakes by 8 basis points to a 1.36% stake in Adani Green Energy (NS: ADNA ) and upped stake by 6 basis points to a 6.02% stake in Adani Total Gas (NS: ADAG ) as of March 31st quarter-end compared to the December quarter-end.

Additionally, LIC also increased its holding by three basis points each sequentially for both Adani Enterprises (NS: ADEL ) and Adani Transmission (NS: ADAI ).

However, it saw marginal cuts on holdings for Ambuja Cements (NS: ABUJ ) (from 6.33% to 6.3%) and Adani Ports & SEZ (from 9.14% to 9.12%).

The move comes after a steep fall of up to 80 percent on some of the group's stocks following allegations made against the company by Hindenburg Research last year that accused them of accounting frauds, stock manipulations, and money laundering.

While mutual funds mostly trimmed their stakes on these counters post the scandalous report release, LIC went against this trend with only minor increases but still showed confidence towards the group's future prospects despite regulatory probes launched into offshore deals conducted by them.

A Reuters report citing sources suggested that this may be due to plans announced earlier last month where they would impose caps on debt and equity exposure limits towards individual firms or groups backed by same promoters as part of efforts aimed at lowering concentration risk faced over criticism regarding investments made into such risky assets like those owned under umbrella conglomerates such as these ones.

Overall, LIC's total Adani holdings under equity and debt categories stood at Rs 35,917.31 crore as of December 31st, 2022.