LIC buys $2-bn worth shares in Indian cos

The country's largest insurer LIC has purchased shares worth over USD 2 billion (about Rs 11,000 crore) in Indian companies - mostly in sectors like utilities, energy and software - during the April-June period, according to a report by BofA-Merrill Lynch.

At the same time, Life Insurance Company (LIC), also among the biggest investors in the stock market, sold shares in media/hotels and consumer good firms worth USD 115 million (about Rs 638 crore).

It purchased shares of state-run NTPC; software firms - Infosys and Tata Consultancy services; energy giants - Reliance Industries and Cairn India. LIC offloaded shares of auto maker Tata Motors and private sector lender HDFC Bank.

As per BofA-Merrill Lynch Global Research report, LIC's major investment during the quarter included NTPC (USD 531 million), Infosys (USD 356 million), RIL (USD 269 million), Cairn India (USD 221 million) and Bajaj Auto (USD 199 million).

On the other hand, LIC lowered its exposure to companies like Tata Motors (selling of shares with an estimated USD 58 million), Syndicate Bank (USD 49 million), Hindustan Unilever (USD 45 million), Allahabad Bank (USD 32 million) and HDFC Bank (USD 23 million).

The report indicates that overall LIC has emerged as net buyer during the April-June quarter and most of the investment was in private sector firms.

In terms of sectors, LIC investments in the utilities portfolio stood at USD 523 million, followed by software USD 490 million, energy (USD 487 million), auto (USD 241 million), industrial (USD 102 million), telecom (USD 77 million), pharma (USD 46 million), financials (USD 45 million), metals and mining (USD 15 million).

In contrast, the insurance giant offloaded shares valued at USD 93 million in the consumer goods firm, USD 13 million in media/hotel category and USD 9 million in cement sector.

Financial sector accounted for 25 per cent of LIC's total equity portfolio in the country followed by energy 15 per cent, consumer goods 12 per cent and industrial space 10 per cent.

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