As the US authorities lashed out at Adani Group of multibillion-dollar bribery, India’s domestic institutional investor, Life Insurance Corporation of India (LIC), saw its holdings in seven Adani stocks drop by nearly ₹9,000 crore in a single trading session.
US Securities and Exchange Commission (SEC), and a US District Court alleged that the Indian business tycoon Gautam Adani, head of India’s Adani Group, his nephew Sagar Adani and six others are involved in a multibillion-dollar bribery and fraud scheme.
As per the shareholding pattern as of September end, LIC held stakes in seven Adani companies.
These included Adani Enterprises, Adani Ports, Adani Green Energy, Adani Energy Solutions, Adani Total Gas, ACC and Ambuja Cements.
According to data from Capital Market, LIC saw a ₹8,720 crore decline in the value of its holdings in these companies.
How much loss LIC faced with Adani’s decline?
In Adani Ports, LIC experienced the largest decline in the value of its holding. It fell by ₹2,960.23 crore, followed by ₹2,995.37 crore loss in Adani Enterprises.
LIC’s holding in Adani Total Gas saw a decline of ₹462.80 crore. The value of LIC’s stake in Ambuja Cement dropped by ₹822.34 crore.
In Adani Energy Solutions, it dropped by ₹716.50 crore, in Adani Green Energy by ₹571.64 crore, and in ACC by ₹191.09 crore.
Which banks have exposure to Adani Group?
According to Nuvama Research estimates, India’s largest lender SBI’s outstanding exposure to Adani Group companies stood at Rs 27,000 crore as of December 2022, while PNB’s stood at Rs 3,300 crore, and Bank of Baroda’s stood at Rs 5,300 crore.
After the Adani turmoil, the State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) saw their stocks fall by as much as 7%.
Bank of Baroda outstanding exposure to Adani Group companies as of December 2022 is at Rs 5,300 crore, IndusInd Bank at Rs 4,200 crore, IDFC First Bank at Rs 870 crore, and Axis Bank at Rs 7,160 crore.
While for the Canara Bank, Union Bank and ICICI Bank, it is undisclosed.
Total loans to Adani Group by SBI, as of September Rs 39.2 lakh crore while around Rs 10 lakh crore each from PNB, Canara, Union Bank and ICICI bank.
What are the charged levied against Adani?
As per the case made out by the the US Securities and Exchange Commission, Gautam Adani has been charged with allegedly “defrauding American investors and bribing officials”.
There are 5 charges levied by the US District Court on Gautam Adani and seven others. These included conspiracy to violate the FCPA, Securities Fraud Conspiracy, Wire Fraud Conspiracy, Securities Fraud – the 2021 144A Bond, and Conspiracy to Obstruct Justice.
Adani, his nephew Sagar Adani, 30, executives of Adani Green Energy, and Cyril Cabanes, an executive of Azure Power Global Ltd were charged with “conspiracy to commit securities and wire fraud, as well as substantive securities fraud, for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions through false and misleading statements”.
The indictment says Adani and the others paid approximately $265 million in bribes. They expected these contracts to generate $2 billion in profit over two decades. Prosecutors claim some involved in the scheme used code names like “Numero uno” and “the big man” to refer to Gautam Adani.
The indictment also alleges Adani, his nephew Sagar Adani, and another executive, Vneet Jaain, hid the bribery from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.
