Union Finance Minister Nirmala Sitharaman on Monday shared an update about the credit risk of Life Insurance Corporation of India (LIC)’s Adani group companies. As of March 5, the state-owned insurance company’s exposure to the port-to-power group led by billionaire Gautam Adani fell marginally 6,183 crore to 6,347 crores till December 31 last year.
LIC Adani holds shares in seven of the group’s 10 listed companies.
out of total 6,183 crore, the exposure of LIC is 5,390 crore to APSEZ. Had exposure to Adani Power (Mundra) 266 Crore, Adani Power Maharashtra Limited – Phase I ( 81.60 Crore), Adani Power Maharashtra Limited – Phase III ( 254.87 Crore), Raigarh Energy Generation Limited ( 45 crores) and Raipur Energen Limited ( 145.67 crore).
In a written reply in the Lok Sabha on Monday, FM Sitharaman said, “Life Insurance Corporation of India (LIC) has informed that it had credit exposure to Adani group companies, 6,347.32 crore and 6,182.64 crore, by December 31, 2022 and March 5, 2023, respectively.
Sitharaman said that five public sector general insurance companies have informed that they do not have any loan or credit exposure Adani Group of companies.
“Public Sector Banks have informed that loans are sanctioned after assessing the viability of the projects, potential cash flows, risk factors and availability of adequate security and the loan repayment is ensured by the revenue generated by the project and not By the market capitalization of the company,” the FM said.
LIC’s investments turned negative a week ago following the debacle of Adani Group shares, following which US-based short seller Hindenburg Research issued a damning report on January 24.
The fall in Adani Group’s shares raised some questions on LIC’s investment decision.
But the rally in Adani Group’s shares after investors poured in money has reversed the situation.
Hindenburg made several allegations against the Adani group, including fraudulent transactions and share-price manipulation, after which shares of the group’s companies plummeted.
The Adani Group has dismissed the allegations as false, adding that it complies with all laws and disclosure requirements.
with agency inputs
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