Fears of loss in Adani Group portfolio send LIC near all-time low

MUMBAI: Shares of Life Insurance Corporation (LIC) saw a slide of over 1% on Friday, in tune with a relatively weak market. Concerns about the insurer’s exposure to the Adani Group weighed heavy on investor sentiments.

At close, the LIC stock was at Rs 585, just a tad above its all-time low level of Rs 582. Shares of the Adani Group continued their relentless decline, dragging down the valuation of the corporation’s investment in the group.

Although Adani Group insiders insisted that LIC made a profit in January this year, when stock prices were near 52-week highs, the insurance giant has yet to issue a statement on the profit or loss status of its Adani portfolio.

According to the most recent BSE disclosures, LIC’s largest investment was in Adani Ports & SEZ, in which it held a 9.1% stake. It also had stakes in six other Adani Group companies ranging from 1.25% to 6.5%. LIC’s stock has lost nearly 17% of its value in the last month.

Friday’s session saw 7 of the 10 Adani Group’s stocks closing in the red. Adani Total Gas, Adani Green Energy, Adani Transmission, and Adani Power were among the seven stocks that closed at their 5% lower circuit level. Adani Enterprises, the group’s flagship stock, also closed 5% lower, but circuit breakers did not apply because it is one of those on which derivatives trading is permitted. Other laggards included Adani Wilmar, which fell 3.3%, and NDTV, which fell 4.1%. Ambuja Cements closed 2.4% higher, Adani Ports & SEZ closed 1.2% higher, and ACC closed unchanged.

The government revealed earlier this month that LIC had paid Rs 30,127 crore for equity in Adani Group businesses in response to a question from the parliament. Additionally, it was stated that this portfolio had a market valuation of Rs 56,142 crore on January 27 at the end of market hours.

Since US short-seller Hindenburg Research released a damning report against the Adani Group, accusing it of accounting fraud, stock price manipulation, and corporate misbehavior, the stock prices of Adani Group businesses have been declining. For almost all of the 10 listed stocks of the Adani Group, the bleeding has not yet ceased.

In its analysis, Hindenburg stated that seven of the group’s stocks—which bear the name Adani—should correct by at least 85% if one strictly followed the accepted valuation metrics and comparative valuations of its peers. The report had stated, “Compared to industry peers, we see 85%+ downside (for Adani Group stocks) purely on fundamentals.”

Adani Total Gas has now lost close to 81% of its worth following Friday’s 5% circuit-breaking close. The stock has dropped by 84% when compared to its 52-week peak, which was reached in April 2022. Adani Green Energy has dropped nearly 75% in the past month, and Adani Transmission has fallen 74%. These two companies are also getting close to Hindenburg’s “85% downside” threshold.

The group’s market value has lost roughly $146 billion, or Rs 12 lakh crore, due to the decline in stock prices over the past month. On January 24, the total market capitalization was Rs 19.2 lakh crore; on Friday, it was Rs 7.2 lakh crore.

IndusInd’s head resigns from the Adani co-board

Due to the fact that the business has received credit facilities from the private lender, Sunil Mehta, chairman of IndusInd Bank, has resigned from the board of Adani Green Energy. On January 31, the RBI approved Mehta’s appointment, and shareholders will shortly vote to ratify the appointment.

The RBI’s regulations prohibit bank directors from serving on the boards of the businesses their bank loans to. Mehta claimed that the credit facilities were provided prior to his appointment to the bank’s board of directors in a message to Adani Green Energy. “In view of the applicable statutory/regulatory restrictions, the bank has requested me to relinquish my directorship in AGEL at the earliest as it will otherwise constrain the bank from renewing / rolling over credit facilities till the continuation of my directorship in AGEL,” said Mehta in his letter.

According to IndusInd Bank, the board of directors decided to conduct a postal vote on a special resolution to appoint Mehta as chairman for three years starting on January 30, 2026, at their meeting on Thursday.

Mehta was the chairman of Yes Bank on the government-appointed board before becoming the chairman and managing director of SPM Capital Advisors, a boutique business advice and consulting company. Mehta, a seasoned veteran of the insurance sector, served as non-executive head of Punjab National Bank from March 2017 to February 2020.