It's been more than a month since Hindenburg Research's report came out and rattled the Adani Group stocks. Besides the bloodbath in Adani stocks since then, the effects have now started to reflect the damage in the stocks of companies associated with LIC.??
Shares of insurance giant Life Insurance Corporation of India (LIC) hit their new all-time low?on Monday amid a sustained decline in Adani Group stocks.?LIC¡¯s stock closed at Rs 567.75 on the NSE yesterday, touching its new all-time low of Rs 566.00 during the trading.
LIC¡¯s market value after yesterday¡¯s fall was Rs 2.4 trillion. LIC¡¯s market capitalisation ranking has now slipped to 12, from 6 at the time of listing, as per a Business Standard report.
In the past month, shares of LIC have plunged nearly 20% since Hindenburg Research¡¯s report came out on January 24th.
On the other hand, most Adani stocks have shown some recovery, and are trading in green today.?
At the time of writing this report, Adani Enterprises is up 13% today, Adani Wilmar and Adani Green Energy are up 4% and Adani Power and Adani Ports are up 5%. However, Adani Transmission and Adani Total Gas are down 5% today.
Also Read:?Meet Nathan Anderson, The Man Behind?Hindenburg?Report
Even though Adani Group stocks account for less than 1% of LIC¡¯s equity portfolio, the market has severely battered its stock.
As of January 31, LIC¡¯s equity and debt holdings in Adani stocks stood at a little less than Rs 36,000 crore. The value of its equity purchase was Rs 30,127 crore. After a precipitous fall in Adani shares, the value of its holdings slipped below the cost of acquisition, stoking concern.
Analysts say investors are worried about the impact on LIC¡¯s business due to the negative sentiment created by its exposure to Adani Group. Besides, there is a constant overhang of the misuse of LIC?as a white knight for government disinvestment.
Currently, as per the report, the?government holds a 96.% stake in LIC and close to 2 percent in retail. Overseas funds hold just 0.17%. Hence, LIC¡¯s value erosion is hurting the exchequer and citizens more than anyone else.
Also Read:?Credit Suisse & Citi Group Halt Loans To?Adani?Group Companies
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