Insurance houses bought Bajaj Finance shares worth Rs 321 crore in the month of August, according to Nuvama Alternative Research, and trimmed stake worth Rs 479 crore in HDFC Bank.
However, HDFC Bank continues to be the top large-cap holding in the portfolios of most insurance houses.
India's life insurance industry, excluding LIC of India, has an aggregate equity AUM (assets under management) of nearly Rs 4.2 lakh crore. According to data compiled by Nuvama's Insurance Portfolio Analyser, the top five players - ICICI Prudential Life Insurance, SBI Life Insurance, HDFC Life Insurance, Tata AIA Life Insurance and Kotak Life Insurance - represent almost 80 percent of this AUM.
In the month gone by, notable additions by these insurance houses included Bajaj Finance, Interglobe Aviation worth Rs 299 crore, Union Bank worth Rs 235 crore and Star Health also worth Rs 235 crore.
Meanwhile, significant reductions were Jio Financial Services worth Rs 558 crore, HDFC Bank worth Rs 479 crore, Mahindra & Mahindra worth Rs 352 crore and Infosys worth Rs 326 crore.
Despite the trimming of stake in M&M, all insurance houses are overweight on the auto sector. On the Nifty 100, the auto sector has weightage of 4.9 percent while in insurance portfolios it is over 6.5 percent.
All the five houses are also overweight on capital goods and pharma & healthcare. On the Nifty 100, capital goods has a weightage of 4.7 percent while insurance portfolios have more than 6 percent. Similarly, pharma has a weightage of 3.4 percent in Nifty 100, while insurance houses have over 3.7 percent.
Surprisingly, except HDFC Life, all other insurance houses are underweight on financial services sector - the darling on investors and analysts.
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New additions and exits
As per Nuvama, ICICI Pru Life added K.P.R. Mill, Union Bank and Tata Communications, with no complete exits in the portfolio. HDFC Life included Sun TV and Union Bank as new entrants, while it exited Sundaram Fasteners.
Utkarsh Small Finance Bank and Engineers India were fresh entrants for SBI Life, while Aarti Industries and Can Fin Homes were complete exits. "They report holdings with a lag of a month, so the data is for July 2023," noted Nuvama.
Tata AIA Life introduced Union Bank and K.P.R. Mill to its portfolio, while Canara Bank and Muthoot Finance were complete exits. Kotak Life Insurance freshly added Interglobe Aviation and Natco Pharma, while Navin Fluorine and Balkrishna Industries were chucked out.
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