LIC Says Its Adani Group Exposure Is Just 0.975% of Its Total AUM at Book Value
Moneylife Digital Team 30 January 2023
Refuting media reports about its higher exposure in the Adani group, the Life Insurance Corp of India (LIC) says its exposure is less than 1% of its total asset under management (AUM) at book value.
In a rare statement, the insurance behemoth says, "LIC's total holding under equity and debt is Rs35,917.31 crore as of 31 December 2022 under Adani group of companies. The total purchase value of equity, purchased over the last many years, under all the Adani group companies is Rs30,127 crore and the market value for the same as at close of market hours on 27 January 2023 was Rs56,142 crore."
"The total amount invested under Adani Group amounts to Rs36,474.78 crore as of date. These investments have, however been made over a period. Further, it may be appreciated that the credit rating of all of the Adani debt securities held by LIC is AA and above, which is in compliance with the Insurance Regulatory and Development Authority of India (IRDAI) investment regulations as applicable to all the life insurance companies," it added. 
As on 30 September 2022, LIC has a total AUM of Rs41.66 lakh crore. "Therefore, LIC's exposure in the Adani group, as of date, is 0.975% of LIC's total AUM at book value," the insurer says.
Further, it says it follows a robust procedure for the valuation of its liabilities and determination of solvency margin to ensure its financial soundness on a continuous basis. "The available solvency margin of LIC as of September 2022 was well above the target solvency level of 160%."  
As on December 2022, LIC held 4.23% in Adani group flagship Adani Enterprises Ltd. 
The exposure of LIC and State Bank of India (SBI) in the Adani group came to the fore last week when US-based Hindenburg Research with a focus on activist short-selling, claimed: "the seven key listed companies of Adani group are 85%+ overvalued even if you ignore our investigation and take the companies' financials at face value."
The Adani group on Sunday responded to the Hindenburg report at length in an over 400-page response (the actual response is 54 pages, while the rest comprises annexures), raising questions against the ulterior motives and modus operandi of the US-based research firm. In response, Hindenburg says it believes that "fraud is a fraud, even when it is perpetrated by one of the wealthiest individuals in the world". (Read: Adani Replies With 413-Page Report; Hindenburg Says Fraud Cannot Be Camouflaged With Patriotism)
2 months ago
What is its exposure to adani group in equity as a percentage to its total equity exposure stipulated as per IRDAI.
As per this its equity exposure in Adani group is must be than 9% of LIC exposue in equity at book value. As per IRDAI Regulations, equity in Non linked business is valued at cost and not marked to market.
Its equity exposure in Adani Group must be highest.
Percentage to AUM would include Investments in debt including Gsec and loans to policy holders which is more than 70%.
Free Helpline
Legal Credit