LIC's Adani group portfolio value surges 51.6% at Rs 66,000 crore

Government-owned Life Insurance Corporation of India (LIC) has seen substantial gains from its investments in Adani group shares, which have experienced a significant recovery over the past year.

The value of LIC's stake in Adani group companies surged by 51.6 per cent, or Rs 22,591 crore, reaching Rs 66,388 crore as of Friday's close.

This compares to Rs 43,797 crore on May 31 last year, according to stock exchange data.

The insurer has also strategically reduced its stake in certain Adani group companies to capitalise on the rise in share prices.

LIC trimmed its stake in group flagship Adani Enterprises from 4.26 per cent to 3.93 per cent over the past year.

It also reduced its holdings in Adani Ports from 9.12 per cent to 7.86 per cent and in Ambuja Cements from 6.3 per cent to 5.69 per cent, according to data submitted to the stock exchanges.

Despite these reductions, the value of LIC's investments in the Adani group has increased.

On Friday, the Ahmedabad-based group's 10 listed companies added Rs 84,000 crore in market capitalisation, bringing the total to Rs 17.9 trillion.

This is the highest since January 24, 2023 — the day US-based short seller Hindenburg Research released a critical report on the group.

It comes just before Adani Enterprises' Rs 20,000 crore follow-on public offer.

The group refuted the allegations and sold shares to multiple foreign investors, including GQG Capital, Qatar Investment Authority, and IHC of Abu Dhabi.

The value of shares owned by GQG, IHC and Qatar Investment has doubled in a year.

The value of domestic institutional investor stakes in Adani group companies also rose dramatically, from Rs 20,688 crore in May last year to Rs 47,792 crore on Friday, a 131 per cent increase over the year.

According to a report by Jefferies, a US-based investment bank and financial services firm, the Adani group has remained resilient despite the setback from the short-seller report, turning the “setback into a comeback.”

The report noted a 40 per cent year-on-year (Y-o-Y) growth in the group's earnings before interest, tax, depreciation and amortisation (Ebitda) in FY24, with the leverage ratio improving to a multi-year low at the group level.

“During FY24, the group focused on containing debt and reducing the founders' share pledge.

"The total group Ebitda grew 40 per cent year-on-year in FY24 to Rs 66,000 crore, even as it raised fresh funds from equity and strategic investors in several group companies,” the report stated.

Adani Enterprises and Adani Energy Solutions announced plans to raise up to Rs 29,100 crore by way of qualified institutional placement of shares.

The group is now embarking upon an ambitious expansion plan, aiming for $90 billion (Rs 75,114 crore) in capital expenditure over the next decade.

Adani Enterprises, the incubator of new businesses, is investing in green hydrogen, airports, data centres, and the petrochemical business.

Jefferies said the company is scaling its captive manufacturing capacity towards green hydrogen production by FY27 and commissioning the Navi Mumbai Airport by March next year.

The group's data centre projects are progressing, while Ambuja Cement, owned by the Adani family, is targeting a capacity expansion from 70 million tonnes per annum (mtpa) to 140 mtpa by 2030, the report said.

Adani Ports recently outlined its five-year business roadmap, targeting an 18 per cent annual Ebitda growth from FY24-29.

The port's Ebitda is expected to grow at 16 per cent annually, driven by expansion and ramp-up efforts, with the company targeting 1 billion tonnes of cargo volume by 2030, the report said.

Meanwhile, Adani Green has raised its 2030 power capacity target from 45 GW to 50 GW, including 5 GW from pumped hydro projects.

Adani Total Gas plans to expand its new business segments, including an LNG station network, for transport and the mining sector, as well as electric vehicle charging facilities.