LIC cuts stake in Axis Bank to 10.2%
The insurance behemoth has been on a selling spree in the banking sector.
June 24, 2019 / 09:24 PM IST
Life Insurance Corporation of India (LIC) has cut stake in Axis Bank by 2 percent to 10.2 percent, as per a CNBC-TV18 report.
LIC had 10.81 percent stake in Axis Bank at the end of the March quarter. LIC had been asked to avoid having high exposure to banks in terms of equity stake, particularly considering they hold 51 percent in IDBI Bank.
Earlier, between October to December 2018, LIC sold 4.76 crore shares in Axis Bank taking its stake in the private lender to 11.53 per cent. The insurance behemoth has been on a selling spree in the banking sector. It reduced its stake in 27 of 30 banks since June 2017, according to shareholding data compiled by Moneycontrol.
The country’s largest insurer and institutional investor holds equity stakes in several other banks, including Axis Bank, Corporation Bank, ICICI Bank, State Bank of India and Punjab National Bank among others. While the life insurer was either closer to or held more than 15 percent stake, it has brought it down significantly over the past year.
According to investment rules of the Insurance Regulatory and Development Authority of India (IRDAI), an insurance company cannot hold more than 15 percent equity stake in one single company. This is to prevent concentration risks and spread the corpus across the companies on offer.
However, LIC was given a special dispensation by IRDAI for investing into IDBI Bank.