Adani Group shares give LIC’s equity portfolio Rs 3,450-crore lift; here’s how

Adani Group shares give LIC’s equity portfolio Rs 3,450-crore lift; here’s how

RK Talent Show 2024

The Life Insurance Corporation of India (LIC) had a better Monday as a rise in the value of the shares of the Adani Group increased the portfolio’s worth by Rs 3,447 crore. On May 22, shares of the publicly traded companies owned by the Adani Group increased by up to 19% after the SC-appointed AM Sapre committee said it was unable to draw the conclusion that the accusation of price manipulation by the Hindenburg involved a regulatory failing. A media report that the company was considering selling off a few real estate properties that were judged non-essential to its business operations led to an increase in the price of Adani stock.

Adani Enterprises was the leading gainer with a surge of 18.84 percent. As of March 31, 2023, LIC owned 4.26 percent of the business. In Monday’s trading, Adani Ports also saw a 6.03 percent increase. According to data, the insurance industry giant owned 9.12% of the company in Q4FY23.

Additionally, Adani Transmission, Adani Total Gas, and Adani Green Energy all exceeded the upper circuit of 5%. On May 22, Ambuja Cement and ACC both experienced gains of 5% and 4.93%, respectively. As of March 31, 2023, LIC additionally owned more than 1% of the companies. The benchmark BSE Sensex, on the other hand, finished 234 points, or 0.38 percent, higher at 61,963.68.

As a result, the market value of LIC’s holding in Adani stocks jumped to Rs 43,325.39 crore on May 22 from Rs 39,878.68 crore on May 19.

While sharing his views on Adani Group of shares, Vinit Bolinjkar, Head of Research at Ventura Securities said: “Sebi clearance clearly indicates that there is no corporate misgovernance. Earlier, shares of the conglomerate fell because of external factors. There’s nothing to do with the business. Adani group of stocks should climb the walls of worry now. The leverage has also been lightened.”

“We are going to see a huge number of institutional investors coming in buying these stocks because the clouds of uncertainty around stocks have been cleared. At the same time, valuations are also good. They have access to growth capital. The Group has emerged stronger. Adani Total Gas and Adani Ports are abysmally valued with strong businesses and cash flow businesses. Adani Enterprises has prioritised asset allocation. With their impending IPO, the green energy business will get wings. That is not discounted in valuations. I will not be surprised if analysts give a target of Rs 4,000 to Adani Enterprises,” Bolinjkar said in an interaction with Sakshi Batra of Business Today TV.

Adani Transmission and Adani Ports & SEZ are two Adani Group equities that have ‘Buy’ ratings from Jefferies. If the Distribution Amendment Act is passed, the brokerage stated that Adani Transmission might stand to gain significantly from it. It also added that Adani Ports could continue to experience medium-term double-digit growth as it replicates the Mundra market share gain narrative at its acquired ports.

Adani Ports, according to Jefferies, has a commanding 22% market share and is the largest volume port operator in India. It was mentioned that as global container rates eased, management was hoping to take advantage of a gradual volume rebound by leveraging its solid balance sheet. In order to provide customers with end-to-end solutions, it is also trying to expand in logistics/warehousing, according to a note from Jefferies.

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