LIC on Adani: Positive on our A1 investments

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LIC says: “We talk to companies that we invest in as a routine,” Mohanty continued, telling CNBC-TV18 that “Adani investments are within our prudent norms.”

LIC on Adani: Positive on our investments in group, they are within prudent norms

Siddhartha Mohanty, managing director, and chief executive officer of the state-backed Life Insurance Corp (LIC), reaffirmed that the insurance company is optimistic about its investments in the Adani group despite a major decline in the stock price of the Gautam Adani-led conglomerate on February 1.

Life Insurance Corporation of India (LIC) is the largest insurance company in India, with a history dating back to 1956.

LIC usually gives a variety of insurance products, including life insurance, annuity plans, and pension plans, to several people and institutions.

LIC is known for its conservative investment style, with a major part of its investments in government bonds and other fixed-income securities. This approach is aimed at ensuring the stability and safety of policyholder funds, while also generating a steady flow of income.

Additionally, LIC majorly invests in equities and other market-linked securities to achieve higher returns over the long term.

Overall, LIC’s investment strategy is focused on preserving capital and ensuring constant returns for its policyholders.

“We talk to companies that we invest in as a routine,” Mohanty continued, telling CNBC-TV18 that “Adani investments are along our prudent norms.”

 

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Following a US-based short-seller report by Hindenburg Research from last week, which voiced doubts about the group’s high debt and the valuations of seven listed Adani industries, along with claims of improper use of offshore tax havens and stock manipulation by the group, Mohanty made his comments.

The group, which has lost about $66 billion since Hindenburg Research, has received more than $4 billion in investments from LIC.

Because of the extreme volatility in the share prices of the Adani group of companies, LIC had previously stated its exposure to those businesses.

According to LIC, the total cost of the shares of Adani Group companies it has acquired over the years is Rs 30,127 crore.

At current book value, this exposure by LIC to the Adani Group represents 0.975 percent of the total assets under management (AUM).

As concerns over stock volatility persisted, most Adani Group stocks fell on February 1. The largest companies in the conglomerate are now experiencing an $84 billion decline.

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In response to news that Credit Suisse no longer accepts Adani companies’ bonds as collateral for margin loans, Adani Enterprises experienced an over 26 percent decline, closing at Rs 2,180.20 per share on the BSE.

Adani Ports, a different group stock, also experienced a 20% decline in price and closed at $492.15 per share.

Ambuja Cements’ 16.56 percent drop to close at Rs 334.60 and ACC’s 5.96 percent drop to close at Rs 1,852 contributed to the group’s further decline.

Investment decisions are subjective and depend on an individual’s personal financial goals, risk tolerance, and market conditions.

Adani Group is a large conglomerate with interests in several industries, and its flagship company, Adani Enterprises Limited, is publicly traded on the Indian stock exchanges.

Investing in Adani Enterprises could offer major returns over the long term, especially if the company continues to grow and perform well in every sector and business.

However, investing in the stock market also comes with risks, and the stock price can be impacted by various risk factors such as economic conditions, industry trends, and company-specific events.

It’s always important to thoroughly research a company and consider numerous factors before making an investment decision.

Seeking the advice of a financial professional may also help determine whether or not Adani is a suitable investment for you.

So as a final call, Adani Group is a conglomerate of companies in India with interests in several industries, including ports, logistics, agribusiness, and renewable energy.

The company has seen significant growth in recent years and has become one of the largest business groups in India.

As for the stock, the performance of Adani Enterprises Limited (the flagship company of the Adani Group) has been strong in recent years, with the stock price rising significantly.

However, the stock market is subject to fluctuations, and the strength of a company’s stock can be affected by various factors such as economic conditions, industry trends, and company-specific events.

LIC's investments in Adani Group have increased sharply in past two years, say reports

In conclusion, while Adani Group is a major player in several industries and its stock has performed well in recent years, it’s important to consider multiple factors and make an informed decision before investing in the stock.

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