LIC, FPI play contrarian game in Adani group shares | Whuff News

The phenomenal rally in Adani group shares over the past year has attracted the attention of the largest domestic institutional investor — Life Insurance Corporation of India (LIC) even as foreign portfolio investors (FPIs) opted to cash out.

Shareholding pattern data for September 2022 from seven listed Adani group companies shows LIC increased its stake in four — Adani Enterprises, Adani Green Energy, Adani Total Gas and Adani Transmission, while it reduced its stake in Adani Ports and SEZ both qoq and yoy.

However, LIC has no reportable investments in Adani Power and Adani Wilmar (AWL). LIC’s stake in AEL jumped to 4.02 percent from 2.22 percent year-on-year; in Adani Total Gas, LIC increased its stake to 5.77 percent (3.58 percent), and 3.46 percent (2.42 percent) in Adani Transmission.

On the other hand, FPI reduced their stake in AEL to 15.25 percent (17.83 percent), AGEL to 15.25 percent (17.83 percent) and Adani Total Gas to 17.44 percent (18.89 percent). But Adani Power seems to be their favourite, as they add 2 percentage points in the company to 13.23 per cent (11.14 per cent).

Long term vision

Market sources said that LIC is seen as betting big on the growth projections set by group chairman Gautam Adani. “We do not see significant investment by other DIIs. But LIC seems to be holding Adani Group shares with a long-term vision,” said a research analyst working with a Mumbai-based brokerage.

Moreover, this is not the first time that LIC has increased its stake in Adani Group shares. During September 2014 to June 2015, LIC increased its stake in APSEZ from 1.45 percent to 3.41 percent. “Like any other investor, LIC also looks at promising valuations and takes profits when opportunities arise. LIC now holds stakes in most Adani Group companies, which means they will have confidence in the group’s business plans,” said another analyst who tracks LIC’s investments.

Notably, the group’s shares have seen a sharp rise between September 2021 and September 2022. At the close of the quarter, AEL’s shares have shown a gain of 136 percent. APL gained 280 percent, followed by ATGL (137 percent), ATL (119 percent), AGEL (75 percent) and APSEZ with the least gain of 11 percent that year.

The latest entrants — Ambuja Cements and ACC — into the Adani Group saw a mixed trend with the former seeing status quo in LIC holdings quarter-on-quarter, while the latter saw marginal accumulation to 6.33 percent (6.14 percent).

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