New Delhi: Life Insurance Corporation of India (LIC) invests in equities taking into account the inherent risk as per its risk management framework, said Tuhin Kant Pandey, secretary at the Department of Investment and Public Asset Management (DIPAM). "LIC has already made it clear and through a public notice of what are their level of investments and what is value is on a particular date of those investments," he said in an exclusive interview, referring to a recent statement by LIC.
LIC, on January 30, said the total value of Adani group company shares it has purchased over the last many years is Rs 30,127 crore, and the market value of them is at Rs 56,142 crore as on January 27. The total assets under management (AUM) of LIC are over Rs 41.66 lakh as of September 30, 2022. Therefore, LIC's exposure in the Adani group, as of date, is 0.975 per cent at book value, the insurance major said.
"LIC can invest in equities because of inherent risk and as per the risk management framework. And within the overall framework of IRDAI which is the regulator," he told ANI. In response to a question on the ongoing plunge in Adani Group companies' shares, Pandey said, "They go into the safe government securities called Gsecs and they also have some rated bonds and equity also they invest they have their investment strategy of going into different things and they have a concentration risk portfolio benchmarks."
However, he said he was not looking into the Adani Group matter as the subject is not within his remit to comment on any private company, as DIPAM deals with central public sector enterprises. "They (LIC) go into the safe government securities called Gsecs and they also have some rated bonds and equity also they invest they have their investment strategy of going into different things and they have a concentration risk portfolio benchmarks," Pandey said.
"So I don't think that we can really say that the LIC is impacted this way or that way and whatever it is impacted from the stock price movements, they will be reflected in their books and LIC has already given a clarification. So beyond that, I can say and if you need further clarification you," Pandey said. There were concerns that the continued fall in Adani Group stocks may impact LIC's investors base.
Shares of Adani Group companies continue to witness sell-off after a report by a US-based Hindenburg Research that surfaced on January 24, which claimed the conglomerate of having weak business fundamentals among others. The US-based firm, in its report, raised concerns about shares of Adani group companies having a possibility of declining from their current levels, owing to high valuations.
Further, the DIPAM secretary speaking about dividends and disinvestment, said the target of the next year is Rs 94,000 crore, of which Rs 51,000 crore is for divestment and Rs 43,000 crore as dividend receipts. "...although there is an overall target, we don't chase the target, as if you know, at any cost we have to do that. We have to also look at the market and shareholders and then only plan disinvestments," he added. (ANI)
