LIC holdings in listed firms at a new high of ₹9.6 tn in Dec
2 min read 10 Feb 2022, 12:20 AM ISTThe insurer increased its holdings despite a 1.5% contraction in front-line share indices
PremiumMUMBAI : Ahead of its proposed mega public offer, insurance behemoth Life Insurance Corp. of India Ltd (LIC) continued its shopping spree on Dalal Street in the December quarter.
The state-owned company’s holdings in listed companies touched a new high of ₹9.58 trillion as of 31 December, up 1.7% from a quarter ago, showed a Mint analysis. This was despite a 1.5% contraction in front-line share indices, the first quarterly decline since the meltdown in March 2020. The last time LIC’s shareholding gained value despite a big quarterly decline in benchmark indices was in the December quarter of 2016.
The analysis covered 321 BSE- and National Stock Exchange (NSE)-listed companies. Its ownership in the companies, by value, increased to 5.24% from 5.17% as of 30 September 2021. Shareholding by the number of shares increased from 6.59% to 6.63%, the highest since 2019-end.
The holding of the largest insurer in India in the companies is well diversified across sectors as it prepares for the initial public offering (IPO), data showed.
LIC remained invested in most sectors in October-December and trimmed its stakes in only a few segments such as infrastructure and engineering, auto and ancillaries, and capital goods over the last two quarters.
LIC commands a 64% market share in gross written premium and is looking to file its draft papers with the market regulator this week. It is likely to offer a 5% discount to its policyholders in the upcoming share sale.
Share prices of 40 of the 75 companies LIC increased its stake in during the quarter rose as much as 45%. The insurer sold stakes in 106 companies, of which 47% witnessed a price erosion. It also added 13 companies to its portfolio, while stakes in the remaining 127 companies remained the same.
LIC has maintained a balanced bet in top stocks in the past year: Out of the 45 Nifty-50 companies it owns, it has upped stakes in 24 and reduced shareholding in 20.
“Interestingly, in the December quarter, FIIs (foreign institutional investors) sold aggressively. However, DIIs (domestic institutional investors) infused more than ₹65,000 crore," said Gaurav Garg, head of research, CapitalVia Global Research.
“In my opinion, LIC has increased its stake in major heavyweights and quality stocks from broader indices. As we are heading towards LIC’s IPO, this increase of 1.7% from the previous quarter and reaching new highs will be an important trigger where D-Street will keep a keen eye."
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