Life Insurance Corporation of India (LIC) has recently made a major investment of Rs 300 crore in Adani Group’s Rs 20,000 crore new offering. This was done as an anchor investor in the company. This move has caused a lot of controversy and raised several questions about the decision-making process behind the investment.
The investment has been made by LIC, India’s largest life insurer. The Adani Group is one of the largest conglomerates in the country and has been growing exponentially over the past few years. It is a diversified group with businesses in infrastructure, energy, logistics and agribusiness.
Congress president Mallikarjun Kharge has attacked the Modi government for the LIC investment in the Adani Group, citing it as an example of the government’s pro-corporate policies. He has also raised questions about the rationale behind the investment and the lack of transparency around the decision-making process.
The Rs 20,000 crore new offering from Adani Enterprises (NYSE:AEL), the flagship of the Adani Group, was launched on Wednesday and was subscribed by a number of investor including LIC, SBI Employees Pension Fund, Abu Dhabi investment Authority, BNP Paribas Arbitrage, Societe Generale, Goldman Sachs and others. The company has raised Rs 5,984.9 crore through the offering.
However, the investment made by LIC has come under scrutiny due to the controversy surrounding the Adani Group. Billionaire Gautam Adani’s group has ruled out any changes in the management team or the directors despite the Hindenburg report. The report accused the company of engaging in insider trading and other fraudulent activities.
Post Hindenburg Report, the value of LIC investment in Adani Group shares have fallen from Rs 77,000 Crore to Rs 53,000 crore, leading to a loss of Rs 24,000 crore. This has caused further controversy with the Congress demanding that the Maharashtra government take back the Dharavi redevelopment project in Mumbai from the Adani group.
LIC’s decision to invest in the Adani Group has raised several questions about the decision-making process behind the investment. It remains to be seen if the investment will be profitable in the long run or if the life insurer will suffer losses due to this decision.