It seems that India's insurance giant,?LIC,?has been ignoring all the noise around?Hindenburg Research's explosive allegations against Adani Group and continues to have faith in the conglomerate.
In the last quarter (January-March 2023), Life Insurance Corporation of India (LIC) ended up increasing its stake in billionaire Gautam Adani's flagship entity, Adani?Enterprises, as well as in three other Adani group firms.
Even as the market value of the stock was reduced to less than half in the quarter amid?Hindenburg?allegations, LIC picked up 357,500 shares of the Adani company. The PSU insurer's stake in Adani Enterprises has gone up from 4.23% in the December quarter to 4.26% at the end of March, according to data from stock exchanges.
LIC also increased its stakes in Adani Transmission, Adani Green, and Adani Total Gas during the quarter.?On the other hand, the insurer pared stakes in Adani Ports and Ambuja Cements. The shareholding remained the same in the case of ACC. It is not known whether the transactions were made before or after the release of the Hindenburg report, as per the ET report.
In its defence, LIC said it invests from a long-term perspective and bases its decisions on detailed due diligence. It had also said its total exposure to Adani Group was less than 1% of its total assets under management (AUM) at book value. In the meantime, the number of small retail investors in Adani Enterprises reportedly went up about three times, to 7.29 lakh. Retailers now own 3.41% of the company, compared to 1.86% in Q3.
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Mutual funds, however, have played it safe by trimming their stake to 0.87% in the March quarter from 1.19% in the December quarter.?The number of MF investors also decreased, to 27 from 31, as per the report.
As part of a fundraising exercise to trim debt and meet other obligations after the Hindenburg report forced the company to call off its FPO, Adani Group had struck a Rs 15,000 crore deal with US-based GQG Partners.
Adani Enterprises is one of the four companies in which the promoters have trimmed their stake. The deal in Adani Enterprises by GQG was worth Rs 5,460 crore, as shares were bought at Rs 1,410.86 apiece. That deal had helped Adani restrict a non-stop fall in the stock. Shares of Adani Enterprises were trading flat at Rs 1,800.55 on Tuesday and are down 57% from their all-time high of Rs 4,189.55.
NRI investor Rajiv Jain, who runs GQG and had recently been in the limelight for Rs 3,100 crore profit, said he expects his investment in Adani companies to deliver multi-bagger returns over a five-year period.
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