LIC loses ₹12,000 crore in Adani shares after indictment

India's largest domestic institutional investor, Life Insurance Corporation of India (LIC), experienced a staggering loss of nearly ₹12,000 crore in its share market investment on Thursday, November 21. This occurred after a sharp decline in the stocks of seven Adani Group companies following bribery charges against the conglomerate's founder.

A sharp decline in Adani stocks affects LIC holdings

Adani Group stocks tumbled by up to 20% after U.S. prosecutors charged the company's founder with bribery in a $250 million case. LIC, holding stakes in Adani Enterprises, Adani Ports, Adani Green Energy, Adani Energy Solutions, Adani Total Gas, ACC, and Ambuja Cements, saw its investments shrink by ₹11,728 crore.

• Adani Ports: LIC's largest loss, withholdings down by ₹5,009.88 crore.
• Adani Enterprises: A decline of ₹3,012.91 crore.
• Ambuja Cements: Reduced by ₹1,207.83 crore.
• Adani Total Gas: Decreased by ₹807.48 crore.
• Adani Energy Solutions: Fell by ₹716.45 crore.
• Adani Green Energy: Dropped by ₹592.05 crore.
• ACC: Down by ₹381.66 crore.

Bribery allegations rock Adani Group

U.S. authorities allege that Adani and associates paid ₹265 million in bribes to secure Indian government contracts. The contracts were projected to generate ₹2 billion in profits over 20 years, including the development of India’s largest solar power project.

A criminal indictment filed in a U.S. court accuses Adani executives of securities and wire fraud. They allegedly misled investors and financial institutions to secure funding. These allegations come nearly two years after Hindenburg Research accused Adani of improper tax haven use and stock manipulation, which the group denied.

Adani stocks face steep sell-off

The bribery charges triggered a massive sell-off in Adani stocks:

• Adani Energy Solutions: Locked at 20% lower circuit at ₹697.70.
• Adani Enterprises and Adani Ports: Declined by 19% and 15%, respectively, by 12.40 PM.
• Other Adani firms, including Adani Green Energy, Adani Total Gas, ACC, and Ambuja Cements, were down by 7% to 18%.

Overall, the Adani Group suffered a market capitalisation loss of ₹2 lakh crore in a single day.

Key takeaways

1. LIC faced a ₹12,000 crore loss in share market investment due to a decline in Adani stocks.
2. U.S. prosecutors accused Adani of bribery and securities fraud.
3. Adani stocks dropped by up to 20%, eroding ₹2 lakh crore in market capitalisation.
4. Allegations follow prior claims of malpractice, which Adani has denied.