India’s largest insurer says it “might” review its stake in the embattled Adani Group after meeting with the management.

Life Insurance Corporation Chairman M.R. Kumar told CNBC in an exclusive interview that the state insurer plans to have a discussion with the Adani management soon to get a better picture of the crisis engulfing the conglomerate.

“As an investor, it’s not often that we have this kind of a situation. But then we have reached out to the management of Adani,” Kumar, told CNBC’s Tanvir Gill in an interview in Mumbai last week, adding the meeting could happen in the coming days.

“We propose to speak to them about this … just to try and understand what’s really happening within the organization, within the Adani group.”

The chairman said the insurer will make a call whether to review its stake in the Adani Group after the meeting. 

For now, LIC has no plans to trim its exposure in the ports-to-energy conglomerate.

“As of now, no,” the chairman told CNBC.

Asked whether that could change after the meeting with the Group, the chairman said it “might.”

On Jan. 30, nearly a week after the Hindenburg report came out, LIC said in a statement it had invested 364.7 billion rupees ($4.47 billion) in Adani companies. That brings the insurer’s total exposure in the Group about 1% of its assets under management.

The state insurer had a 4.23% stake in the conglomerate’s flagship business Adani Enterprises as of end 2022, according to FactSet data. LIC also owns 9.14% of Adani Ports as of Nov. 11 last year, FactSet showed.

Shares of various Adani Group companies have seen a massive sell-off after the U.S. based short-seller Hindenburg Research accused it of “brazen stock manipulation” and “accounting fraud.” 

The Adani Group has denied those accusations, calling it a “calculated attack on India” and its institutions.

On Friday, Moody’s downgraded the ratings outlook for four Adani Group companies to negative from stable.

“These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the Group,” Moody’s said in a statement.

In a further blow, global index provider MSCI last week said it will cut the weightings of some Adani Group businesses, including flagship firm Adani Enterprises.

Nathan Anderson, founder of Hindenburg, following the MSCI move on Twitter said: “We view this as validation of our findings on offshore stock parking by Adani.” 

Still, the LIC chairman said the national insurer isn’t too concerned about the conglomerate’s high debt levels or the recent volatility in Adani’s share price. He stressed LIC makes its investment decisions based on market fundamentals.

“I can assure you that all investment decisions taken by LIC, are basically on fundamentals, on company valuations — whether it is debt or equity,” Kumar said.

The Adani fallout has raised concerns about the group’s exposure to India’s leading banks and insurers.

India’s opposition parties have targeted both the LIC and State Bank of India, the country’s largest lender, for their investments in the conglomerate.

India’s main opposition Congress party accused the government as well as LIC and SBI for squandering public money and demanded a probe into the allegations made in the Hindenburg report.

The opposition party also organized street protests outside several LIC and SBI offices across the country last week, over their exposure to the Adani Group.

Last week, the State Bank of India told CNBC,  the loans they extended to the Adani group are well covered and there should be no immediate risks. The bank added the Indian public doesn’t need to be concerned about their deposits in the bank.

LIC’s chairman echoed a similar sentiment saying the state-owned insurer’s fundamentals remain robust.

“I think we have very strong fundamentals in place. The growth drivers are intact … we are growing very well this year,” said Kumar. “So I believe that people need not have any worries about where they’ve invested their money.”