“Adani Group Stocks Under Fire: Are LIC and SBI Investments Safe?”
Recently, Adani Enterprises shares and other Adani group stocks have been under pressure following a report by US-based short seller Hindenburg Research that raised 86 questions about the group. The debt positioning of the Adani group companies and the investments by Life Insurance Corporation (LIC) of India and State Bank of India (SBI) have also come under scrutiny.
However, stock market experts have stated that despite the sell-off in Adani group stocks, LIC is sitting on a profit of around ₹30,000 crore from its investment. SBI has reported that its debt exposure in Adani group companies is just 0.90 per cent of its total loan book and the bank is confident that it can recover from this debt exposure in 9-10 months, as its return on equity is over 10 per cent.
In regards to the safety of public money invested in SBI and LIC, Santosh Meena, Head of Research at Swastika Investmart, stated that investors should not be concerned. He mentioned that SBI’s exposure to the Adani group is only 0.88% of its total loan book and the bank is backed by strong cash flows.
Avinash Gorakshkar, Head of Research at Profitmart Securities, also spoke on the impact of the Adani-Hindenburg issue on LIC and SBI. He stated that LIC has declared that its investment in Adani group stocks is around ₹30,000 crore, with an absolute value of ₹40,000 crore. The insurance company is sitting on a one-third return on its investment in Adani group stocks over the years and has around ₹26,000 crore cash in hand and ₹21,000 crore in unclaimed funds, in case its investment in Adani group stocks becomes zero.
In conclusion, despite the recent controversy surrounding the Adani group, expert analysis suggests that public money invested in SBI and LIC is safe.
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