Life Insurance Corporation of India (LIC) on Thursday took Rs 8,566-crore notional hit on its exposure to seven Adani group companies, as the stocks nosedived up to 24 per cent after US prosecutors indicted billionaire Gautam Adani and seven other senior business executives in connection with an alleged $250 million bribery scheme that they said was concealed from US investors.
LIC’s holding in Adani stocks stood at Rs 46,294 crore in value terms at today’s closing against Rs 54,861 crore on Tuesday, as per data compiled from corporate database AceEquity. Stock exchanges were closed on Wednesday for Maharashtra elections. LIC owned 1.36-7.86 per cent stakes in ACC Ltd, Adani Total Gas Ltd, Adani Energy Solutions Ltd, Ambuja Cements Ltd, Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd and Adani Green Energy Ltd. LIC generally holds shares from a long-term perspective.
A Reuters report suggested that arrest warrants have been issued in the US for Gautam Adani and his nephew Sagar and prosecutors plan to hand those warrants to foreign law enforcement. The Adani group has called the accusations baseless.
ACC dropped 7.92 per cent to Rs 2,011.90. LIC owned 6.39 per cent stake in the cement maker. Adani Total Gas, where LIC held 6.02 per cent stake as of September 30, declined 10.40 per cent to Rs 602.35.
Adani Energy Solutions Ltd bled 20 per cent to Rs 697.70. LIC’s exposure to this Adani firm stood at 2.78 per cent as on September 30. Ambuja Cements Ltd, where LIC held 5.07 per cent, fell 11.98 per cent to Rs 483.75.
Adani Enterprises Ltd shares in fact tumbled 22.61 per cent to Rs 2,182.55. LIC’s stake in the Adani flagship stood at 4.07 per cent. Adani Green Energy Ltd and Adani Ports and Special Economic Zone Ltd fell 18.80 per cent and 13.53 per cent, respectively. LIC owned 7.86 per cent stake in Adani Ports and 1.36 per cent stake in Adani Green Energy Ltd.
Narinder Wadhwa, Managing Director at SKI Capital said US laws allow for settlements in bribery cases, often through Deferred Prosecution Agreements (DPAs) or Non-Prosecution Agreements (NPAs). Companies can resolve charges by paying fines, admitting certain wrongdoing, and improving compliance practices.
“Notable precedents, like Siemens ($800 million) and Ericsson ($1 billion), suggest Adani may pursue a settlement to cap reputational and financial losses,” he said.
