Life Insurance Corporation of India (LIC), which is the largest institutional investor in the Indian stock markets, net bought shares worth Rs 17,000 crore in the first quarter of the current financial year.
The strong buying by LIC comes at a time when other categories of domestic investors including mutual funds and retail investors have already been aggressively buying shares, adding to the resilience of the markets on the back of domestic support.
In the June quarter, mutual funds invested approximately Rs 1.1 lakh crore, while insurance companies and banks made net purchases of Rs 5,035 crore and Rs 628 crore, respectively. Retail investors were net buyers at around Rs 39,278 crore. In sharp contrast, foreign investors offloaded shares worth about Rs 8,495 crore during the same period.
Meanwhile, LIC bought Indian shares worth Rs44,500 crore and sold Rs6,260 crore in the quarters ending March 31, 2024, and December 31, 2023, respectively.
The insurance behemoth added 11 new stocks and increased its stake in 89 existing ones during the June quarter. On the other hand, it reduced holdings in 95 stocks and exited 11 others – it could not be ascertained if LIC has completely exited the stocks as names of shareholders that own less than one percent are not disclosed.
As of the end of the June quarter, LIC held 321 stocks in its portfolio, the cumulative value of which is pegged at around Rs 15.71 lakh crore. For the quarter ended March 31, 2024, LIC held a stake in 333 companies with a portfolio value of Rs 14.29 lakh crore.
During the June quarter, the biggest addition for LIC in terms of new companies was REC Ltd, followed by Dalmia Bharat and Poonawalla Fincorp.
Based on average stock prices for the June quarter, LIC is likely to have spent around Rs 1,485 crore for REC, Rs 1,097 crore for Dalmia Bharat, and Rs 466 crore for Poonawalla Fincorp.
Other additions include Ceat (Rs 146 crore), Dalmia Bharat (Rs 128 crore), ITDC (Rs 112 crore), Texmaco Rail & Engineering (Rs 112 crore), Deepak Fertilisers (Rs 91 crore), Arvind Fashions (Rs 72 crore), Dee Development Engineers (Rs 41 crore), PSP Projects (Rs 38 crore), and Ador Welding (Rs 28 crore).
Rajesh Palviya from Axis Securities is of the view that LIC invested wherever they found valuation comfort. With a mandate to invest in equity markets, they likely have various schemes requiring cash deployment and hence probably took advantage of market volatility, such as the knee-jerk reaction on election results day, to deploy cash, he says.
He further adds that the net buying activity also indicates that LIC is bullish on local markets, even at high levels and that it believes in India's growth story, especially post-budget, which announced several growth-oriented measures.
Meanwhile, LIC's name was absent from the shareholding patterns of several companies, including Bank of Maharashtra, ICICI Lombard General Insurance, and Hitachi Energy India. Other companies include DCB Bank, TIL Ltd, Century Enka Ltd, Ballarpur Industries Ltd, Jaypee Infratech Ltd, Integra Essential Ltd, Modern Denim Ltd, and MAC Hotels Ltd.
Among LIC's top additions, Infosys saw the largest increase, with a stake worth Rs 2,768 crore, followed by LTIMindtree at Rs 2,422 crore and L&T at Rs 2,116 crore. By the end of Q1, LIC's holdings in Infosys, LTIMindtree, and L&T were valued at Rs 63,245 crore, Rs 10,600 crore, and Rs 55,964 crore, respectively.
On the other hand, Tata Power saw the largest cut, with LIC reducing its stake by Rs 2,170 crore, followed by Siemens and Hindalco Industries Ltd, with reductions of Rs 1,885 crore and Rs 1,539 crore, respectively. LIC currently holds stakes worth Rs 8,128 crore in Tata Power, Rs 3,448 crore in Siemens, and Rs 8,750 crore in Hindalco.
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