The Life Insurance Corporation of India has informed the centre that its debt exposure to Adani Group companies was Rs 6,347 crore and Rs 6,183 crore, as on December 31, 2022 and March 5, 2023, respectively, Finance Minister Nirmala Sitharaman said Lok Sabha in a written reply. 

Life Insurance Corporation's outstanding debt in Adani Ports & Special Economic Zone Ltd (APSEZ) stands at Rs 5,388.6 crore as of March 3, 2023. On March 11, the government decided not to extend the term of LIC chairman M R Kumar.

Notably, LIC holds shares in 7 out of the 10 listed entities of the Adani Group. Of the total USD 6,183 crore, theLife Insurance Corp has an exposure of USD 5,390 crore to APSEZ. The exposure in Adani Power (Mundra) was USD 266 crore, Raigarh Energy Generation Ltd ( USD 45 crore), Adani Power Maharashtra Ltd - Phase I ( USD 81.60 crore), Adani Power Maharashtra Ltd - Phase III ( USD 254.87 crore),  and Raipur Energen Ltd ( USD 145.67 crore).

In a written reply to the Lok Sabha on Monday, FM Sitharaman said, "The LIC has informed that its debt exposure to Adani Group of Companies, was USD 6,347.32 crore and USD 6,182.64 crore, as on December 31, 2022, and March 5, 2023, respectively".

FM Sitharaman said, five public sector general insurance companies have disclosed that they have no exposure to the Adani Group of Companies in terms of loans or credit.

The repayment of loans is guaranteed by the revenue generated by the project, not by the market capitalization of the company, according to the FM. "Public Sector Banks have informed that loans are sanctioned after assessing the viability of projects, prospective cash flows, risk factors, and availability of adequate security," the FM said.
LIC's investments turned negative a week ago as a result of the collapse in Adani Group stock that occurred after US-based short seller Hindenburg Research published a devastating report on January 24.

Some people had doubts about LIC's investment choice as a result of the decline in Adani Group equities. But, the scenario has changed as a result of the surge in investor interest in the Adani Group equities.

Shares of the group firms suffered after Hindenburg levelled a slew of accusations against the Adani group, including false claims of dishonest business dealings and share price manipulation.

The Adani Group has denied the accusations, claiming that it abides by all legal and disclosure obligations.

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