Life Insurance Corporation of India (LIC), a government-owned agency that’s India’s largest insurance coverage company, is shifting in direction of limiting its debt and fairness publicity to corporations.

This comes after LIC, probably the most trusted title in India’s insurance coverage business, was harshly criticized for having invested roughly 1% of its $508 billion in property underneath administration in corporations belonging to the troubled Adani group. The massive rout in Adani shares, triggered by allegations of fraud from the US-based brief vendor Hindenburg Research in January, has pressured traders to trim their holdings in group corporations.

Till the discharge of Hindenburg’s report on Jan. 24, LIC’s funding in Adani shares stood at greater than $9.8 billion. By early March, it had slumped to $3.6 billion, The Economic Times reported.

In a bid to dilute comparable dangers, LIC now plans to additional slender its publicity to individual companies, group corporations, and corporations backed by a single promoter, Reuters reported right this moment (March 24).

At current, India’s insurance coverage regulator prohibits LIC from investing greater than 10% of all its excellent fairness or debt in any single firm. In different phrases, an funding in a single firm’s shares could make up not more than 10% of the overall worth of LIC’s fairness portfolio. Additionally, insurers will not be allowed to carry greater than 15% of their funding funds within the property of corporations owned by a single promoter group.

The limits as they at present stand “could lead to [LIC’s] investment getting impacted due to volatility in the market, and likely erosion of funds owed to policyholders,” Bahroze Kamdin, a companion at Deloitte India, informed Reuters.

LIC’s shareholding in Indian corporations

The worth of fairness holdings by LIC, the most important institutional investor in Indian markets, stands at over $14.2 billion, in response to Trendlyne.

Its stake in Adani Ports amounted to 9.14%, adopted by Adani Total Gas (5.96%) and Adani Enterprises (4.23%). For Adani Transmission, the determine was 3.65% and 1.28% for Adani Green Energy. Other corporations embrace IDBI Bank (49.24%), ITC (15.29%), Mahanagar Telephone Nigam (13.25%), and Larsen & Toubro (12.5%), Business Today reported.