India’s leading life insurers added automobiles, airports, consumer companies, and select new-age businesses to their equity portfolio in May, while cutting holdings in some large banks, capital-goods and power stocks.
Mahindra & Mahindra was the biggest purchase during the month, with insurers buying shares worth ₹462 crore of the automaker, according to Nuvama Alternative and Quantitative Research. GMR Airports was the next, attracting investments worth ₹428 crore.
Consumer electronics company LG Electronics and eyewear retailer Lenskart were also among the top additions, attracting investments of ₹277 crore and ₹242 crore, respectively. FMCG giant Hindustan Unilever, automaker Tata Motors Passenger Vehicles and IT major Tata Consultancy Services were other prominent purchases.
The data tracks the portfolios of ICICI Prudential Life Insurance, SBI Life Insurance, HDFC Life Insurance, Tata AIA Life Insurance and Kotak Life Insurance. Consolidated month-on-month purchases and sales, however, cover four insurers, excluding SBI Life because its latest factsheet was not available.
“This is selective portfolio rebalancing rather than a clear sector rotation,” said Harshal Dasani, business head at INVasset PMS. “Life insurers typically run large, benchmark-aware portfolios, so one month of buying and selling should not be seen as a wholesale change in their market view. They appear to be trimming areas where valuations, ownership or recent performance have become heavy, while adding businesses where earnings visibility, consumption recovery or structural growth is improving,” he added.
Autos draw fresh interest
Automobile stocks attracted some of the strongest buying in May. Mahindra & Mahindra was the biggest addition across insurers, with Kotak Life alone purchasing shares worth about ₹461 crore.
Tata AIA Life added Tata Motors Passenger Vehicles worth ₹236 crore and Hindustan Petroleum worth ₹178 crore. SBI Life increased its exposure to Tata Steel by ₹199 crore and Persistent Systems by ₹133 crore.
ICICI Prudential Life purchased Hindustan Unilever shares worth ₹215 crore and Tata Consultancy Services worth ₹185 crore. HDFC Life added LG Electronics worth ₹231 crore and Coforge worth ₹162 crore.
Recently listed and new-age companies also found favour. Pine Labs, Lenskart and Premier Energies were among the prominent additions during the month.
PhysicsWallah, Grindwell Norton and BlackBuck entered the combined portfolios of the four insurers covered in the month-on-month analysis. In contrast, Cello World, JB Chemicals and Pharmaceuticals, Lodha Developers and Birlasoft were completely exited.
“Autos and consumption continue to offer a reasonable investment case, supported by recovering rural demand, premiumisation and healthier corporate balance sheets, “ he said. ”New-age companies are also gradually moving from growth narratives to measurable operating performance, making them more suitable for long-term institutional capital,” said Dasani.
Banks remain core holdings
Despite some selling during May, financial stocks continued to dominate insurer portfolios.
HDFC Bank remained the biggest holding across the five insurers, with an investment value of ₹26,714 crore. It was followed by Reliance Industries at ₹19,619 crore and ICICI Bank at ₹14,784 crore.
Infosys, Bharti Airtel and Larsen & Toubro were also among the largest holdings. Together, these stocks underline insurers’ continued preference for large, liquid companies with established earnings records.
However, allocation varied sharply between insurers. Banking accounted for nearly 48% of Kotak Life’s equity portfolio and about 41% of SBI Life’s portfolio, compared with around 25% weight in the Nifty 100. Tata AIA Life, in contrast, had a lower banking allocation of about 15%.
Profit-taking in select stocks
Varun Beverages saw the largest combined reduction in May, with insurers selling shares worth ₹396 crore. HDFC Bank followed with net sales of ₹334 crore.
Bharat Heavy Electricals and Tata Power also saw sizeable reductions of ₹278 crore and ₹260 crore, respectively. Other stocks trimmed included Divi’s Laboratories, Tata Motors Passenger Vehicles, Jubilant FoodWorks and UltraTech Cement.
At the individual level, SBI Life cut its Larsen & Toubro holding by ₹1,061 crore and Axis Bank by ₹542 crore. Kotak Life reduced HDFC Bank by ₹416 crore, while Tata AIA Life lowered exposure to HDFC Bank, NTPC and Divi’s Laboratories.
“The cuts in large banks, engineering and power companies should partly be seen as profit-taking and risk control after sharp gains and high institutional ownership,” Dasani said. “The broader message is not that market leadership has permanently shifted, but that institutional investors are becoming more valuation-sensitive and stock-specific.”