Adani-Hindenburg Row: Is public money safe in LIC and SBI?

Post Hindenburg Research report, Gautam Adani, the Indian billionaire industrialist withdraw Adani Enterprises FPO after a huge sell off in share price of Adani Enterprises. An initial decline in the share prices of companies associated with Adani group sparked fear in those who have an SBI account and LIC.

Photo Source: Business Today

Adani-Hindenburg Row: Adani Enterprises shares and Adani group stocks are under constant sell off streak after Hindenburg, the US- based short seller released a report challenging the debt positioning of the Adani group and raising 86 questions from it.

The Hindenburg report put state insurer Life Insurance Corporation (LIC) of India and State Bank of India (SBI) in Adani Group under threat and the SBI accountholders and LIC policyholders under fear of their investments.

As per the stock market experts, the sell off of Adani stocks didn’t really pose threat to LIC and SBI. LIC has profit earnings on its investment of around Rs. 30,000 crore. Coming to SBI, it’s debt exposure in Adani Group-owned companies is around 0.90 per cent of its total loan book which positions SBI in a state where it can recover from its debt exposure in Adani Group in about 9 to 10 months as its RoE is more than 10 per cent. 

Even if Gautam Adani led Adani group fails to obtain a green flag against Hindenburg allegations, LIC holds Rs. 26,000 crore in-hand cash and still has an unclaimed amount of about Rs. 21,000 crore. This means that they have enough cash to reimburse the public investors money incase Adani group stocks becomes nil. 

On investment crisis and panic among public in SBI and LIC amid Adani-Hindenburg Row, one thing that raises concern over safety of public money is that the bond prices of Adani Ports and Adani Green, maturing in 2024 received a major hit along with Adani group stocks; this can be the matter of concern. 

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *