The Life Insurance Corporation of India (LIC) is reportedly planning to set caps on its debt and equity exposures to companies — as it looks to bring down concentration risks after the meltdown in Adani stocks following the Hindenburg report.

Shares of all the Adani firms saw a huge erosion in their market value following the report of the short-seller which alleged the conglomerate indulged in stock manipulation and accounting fraud.

While the Adani group has denied the charges of Hindenburg, the $4 billion investment by LIC in some of its firms created political ripples with parties such as the Congress asking the government as to who forced the insurance behemoth to take such a “risky exposure’’ to the group. Adani group shares have recovered from their steep losses in recent sessions.

A Reuters report quoting sources said that the country’s largest life insurer is looking to have “boundary conditions” on its investments that would limit its exposure to a scrip. It added the ceiling would first be decided by the company’s investment committee after which it will be presented to its board.

The report said LIC is also planning to come up with sub-limits for such investments to keep a check on its exposure.

LIC had invested a little over Rs 30,100 crore in the shares of Adani group companies. It has a debt exposure of Rs 6,182 crore as of March 5, 2023.

Debts have declined marginally from Rs 6,347 crore as of December 31, 2022. Finance minister Nirmala Sitharaman had recently said in a written reply to the Lok Sahba that LIC has a debt exposure of Rs 5,388.60 in Adani Ports.

Adani Power (Mundra) owes the insurer Rs 266 crore, Adani Power Maharashtra Ltd — Phase I Rs 81.60 crore and Adani Power Maharashtra — Phase III (Rs 254.87crore).

On Friday, the shares of the state-owned life insurer ended at Rs 560.05 — a fall of 1.58 per cent over the last close. During intra-day trades, the counter hit a 52-week low of Rs 559.