Gajendra Singh, an LIC agent based in Lucknow, says the rumours over the financial investor losing money due to its exposure in Adani stocks are mere propaganda. Read his views:
Thanks to easy and quick information available on the Internet and social media, most investors are nowadays well informed about their finances. The recent downslide in the stock prices of Gautam Adani group led to fear-mongering that LIC had suffered losses in the free-fall. Thankfully, there was also reliable information accessible to ward off this misinformation campaign and LIC too cleared the air in good time about the episode.
Now, our customers even know the exact figure (₹36,474 crore) invested by the LIC in the Adani group and also the fact that this figure is less than one per cent of LIC’s total stake in the market. Interestingly, one of my customers also informed me that as on January 27, 2023, the exact market value of the Adani shares and claimed that it was set to rise in near future when the commotion is over.
I have had a long association with LIC and I can assure you that it is an ethical financial institution with a vast business and its performance or profits carry minimum risk in any kind of similar situation. Even a much bigger or wider bloodbath in stock markets cannot shake its strong fundamentals.
If things were the same what is being projected, many private organisations with more lucrative offers could have weaned away LIC customers to their kitty. But the faith of people (in LIC) is absolutely unaffected; not a single of my customers contacted me to clear any doubts about the group, regarding the Adani saga. I have sold many policies even after the Adani issue came to the fore and my `business’ or the flow of my customers has remained the same.
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LIC itself has clarified that its investment in Adani Group companies has been a long term deal. The debt securities held by LIC (of Adani Group) have a credit rating of AA or above and the investments have been made as per the norms prescribed by IRDA (Insurance Regulatory and Development Authority). LIC very well takes care of the guidelines and regulations set for investment and invests in any company for a long period of time and only after rigorous due diligence.
My personal opinion is that this misinformation was deliberately spread out for political gains as Lok Sabha elections are scheduled for next year and the Adani group is seen to be close to Prime Minister Narendra Modi. So it is possibly an act to sabotage the BJP electoral prospects, and such allegations are not uncommon in political world.
LIC is not only India’s largest insurance company, but it is also the largest institutional investor in the Indian stock market. It is a much bigger investor than even the largest FPI (foreign portfolio investment) and it is important to understand that the group invests in diverse investment instruments. Thus, people (investors) should not give heed to any such propaganda or panic. Instead, they should scan related information from reliable news networks or professionals.
As told to Rajat Rai