Shares of the Life Insurance Corporation of India were down nearly 4% on Monday.

What Happened: The company's stock was in the red after climbing higher last week following strong first-quarter results. 

While the exact cause for its fall is uncertain, it is likely related to a new controversy surrounding the Adani Group, in which it has significant exposure. 

LIC increased its stake in the group flagship Adani Enterprises to 4.07% in the April to June quarter, up from 3.93% in the previous quarter, as per its shareholding pattern on BSE. The country's largest insurer held 7.86% of Adani Ports and Special Economic Zone.

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The dip in Adani stocks on Monday has likely taken a toll on its investors. Shares of Adani Group companies plunged after U.S. short-seller Hindenburg Research released another scathing report against the conglomerate.

The research firm alleged that Madhabi Buch, chairperson of the Securities and Exchange Board of India (SEBI), held stakes in offshore entities involved in the Adani money siphoning scandal.

On the other hand, Kotak Institutional Equities was unimpressed by the company's first-quarter performance. LIC reported a 9.6% jump in its standalone net profit to ₹10,461 crore, while its net premium income came in at ₹1.13 lakh crore, a 15.6% year-on-year increase. However, Kotak appeared bearish about the compression in margins across product lines.

"While the non-par story is playing out well, the consistent segmental margin compression is disappointing," the brokerage said in its note. It had a "buy" rating for the stock with a target price of ₹1,300.

Price Action: LIC was trading 3.48% lower at ₹1,094 on Monday.

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