LIC debt exposure to Adani Group remains constant

Did LIC sell out of Adani group; was the million dollar question. After all, the controversial Hindenburg Report saw many groups like Credit Suisse, Morgan Stanley and Citigroup refusing to accept Adani shares and bonds as collateral for loans. They say, in times of crisis, it is our national champions we can count on. LIC has not come out and made a public statement that it had not reduced exposure to and of the Adani Group companies so far. However, LIC also added that it was closely observing and taking feedback from the Adani top brass.

Not all policyholders may be pleased with this announcement as people are worried that LIC standing by Adani group may not be the best decision in these tough times. However, LIC has traditionally stood by Indian managements and entrepreneurs and avoided any management disruption. Policyholders of LIC are worried that if the Adani stocks fall further, it could spell trouble for the investment value of the insurance policyholders. 

LIC chairman, MR Kumar, has explained that the modus operandi of the company in handling investments is dictated by well thought out processes. LIC is essentially a very long term investor and does not worry about short term volatility. LIC will assess the unfolding of events as well as the outcome of future talks with the Adani Group management before taking a call.

LIC has been an active investor in Adani group companies like ACC and Ambuja way before these were acquired by Adani group. They put strong belief in the companies which form part of their portfolio; and that includes most of the blue-chips in Indian markets. LIC does not worry too much about noise in markets. As Warren Buffet said, “In the short run, the stock market is a voting machine but in the long run, it is a weighing machine”.