LIC’s investment in shares rises to 3.97% in April-June quarter

Life Insurance Corp. of India (LIC), the largest domestic institutional investor in Indian stock markets, raised its stake in listed companies to 3.97% in the April-June period.

LIC’s holding in 292 companies listed on the NSE were at 3.88% in the March quarter on an aggregate basis by value percentage, but fell from 4.12% in the year-ago quarter, data from Prime Infobase showed. In absolute value terms, its holding was at ₹5.40 trillion in June-end, showing a rise of 26.93% over the last quarter.

On an overall basis, LIC’s holding went up in 56 companies listed on the NSE during the quarter, while its holding in 28 companies fell.

In the June quarter, LIC increased its stake in Dredging Corp. of India, GAIL, Havells India, Bata and Tata Steel, data shows. Companies in which LIC reduced its stake include Britannia Industries, Western India Plywoods, Dr Reddy’s Laboratories, Garden Reach Shipbuilders and Engineers Ltd, and Sheshayee Paper and Boards Ltd.

LIC bought shares at a time when business volumes of most life insurers were hit due to the covid-19-led lockdown, with most reporting significant declines in total annual premium equivalent.

“The first year premium growth for LIC was 81.2% in Q1FY20, compared to a drop of 18.5% in Q1FY21. On the other hand, private companies reported growth of 32% in Q1FY20, compared to a drop of 19.2% in Q1FY21 till May, “ said Care Ratings.

The life insurance sector saw an 18.6% fall in first year premium to ₹49,335 crore in Q1 from ₹60,637 crore in the year-ago. Besides, the overall sum assured declined by 12.9% from ₹10 trillion in Q1FY20 to ₹8.8 trillion in Q1FY21. Care Ratings said that due to the lockdown and business disruption, the life insurance business witnessed a fall in Q1 FY21. Overall, net domestic institutional investors inflows, which includes mutual funds, insurance companies, banks and financials and pension funds, stood at ₹12,992.62 crore in the three months ended June.