LIC’s exposure to Adani much less than to other groups, say officials
NEW DELHI: The department of financial services (DFS) in the finance ministry and govt’s policy think tank Niti Aayog have no role in the investment decisions of LIC, and the investment guidelines of the state-owned company are governed by board-approved policies, officials said on Saturday, adding that the insurer’s exposure to the Adani Group is far less than to other conglomerates. LIC’s investment in the Tata Group is estimated at Rs 1.3 lakh crore, while the exposure to the Aditya Birla Group is Rs 42,600 crore. On equity side, LIC owns 4% of Adani stocks (Rs 60,000 crore), compared with 6.9% (Rs 1.3 lakh crore) in Reliance, 15.9% (Rs 82,800 crore) in ITC, 4.9% (Rs 64,725 crore) in HDFC Bank & 9.6% (Rs 79,361 crore) in SBI, officials emphasised. Speaking on condition of anonymity, officials expressed suspicions about the timing of the allegations levelled by Washington Post. Coming at a time when GST reforms have triggered record-breaking sales in the festive season, it could well have been timed to destabilise a robust economy. They rejected allegations levelled by Washington Post that govt officials had drafted plans to steer billions of dollars of LIC funds into Adani Group companies, adding that LIC is a listed company and its investments are subjected to regulatory oversight of independent regulatory authorities such as stock market regulator Sebi and insurance watchdog IRDAI. They said LIC has been investing in various companies and groups, and it is a routine process for such a large investment conglomerate. LIC, which is managing over Rs 55 lakh crore, invests in equities and debt instruments based on the market and interest outlook, asset-liability management objectives, its fund requirements and the overall objective of optimising returns for stakeholders. While LIC’s annual investment is around Rs 5.5 lakh crore, investments mentioned in the Washington Post report were less than 1% of the total annual investment. Arguing that this wasn’t the first instance of the insurer being the sole bidder, officials said the public sector behemoth participated in online bids for the Rs 5,000 crore bond issue by Adani Ports and SEZ as they enjoyed AAA rating, after taking necessary approvals. It did not invest in bonds of Adani Green, they added. “LIC’s investments follow the guidelines prescribed in a very transparent manner and are concurrently audited by independent auditors, reviewed by the board as well as IRDAI, the regulator, and they are reported in the manner required under public disclosure formats of IRDAI,” said an official.
