How much has India's largest insurer suffered in the Adani fiasco?

Hindenburg Research’s allegations of fraud against the Adani group have scorched the Life Insurance Corporation of India (LIC).

Its holdings in the Adani stocks account for less than 1% of the total equity portfolio of India’s biggest insurer. But that was enough to do the damage.

The US-based financial forensic investigative firm alleged in January that the Gautam Adani-led group had indulged in fraud and stock manipulation. It reported that the group’s seven listed firms were overvalued by more than 85%.

Within a month of the publication of Hindenburg’s report, the share price of Adani Total Gas has fallen by 81%, that of Adani Transmission by 74%, Adani Enterprises by nearly 62%, and Adani Ports by more than 26%.

Exposure to Adani has robbed LIC of its wealth

On Jan. 24, when the report was published, LIC held around $9.8 billion worth of Adani stocks. Since then, the value has plunged by more than $5.9 billion.

LIC’s own stocks have, in this time, fallen 17% to a record low. It suffered its biggest loss in Adani Total Gas’s stock—down from $2.5 billion on Jan. 24 to nearly $604 million. It also lost $1.2 billion in Adani Enterprises and $1 billion in Adani Transmission.

The Adani meltdown is being seen as a key reason for the 40% erosion—$29.02 billion—in LIC’s market capitalization since its listing last May. It isn’t among India’s top-10 large-cap stocks anymore.