Stocks

LIC buys Infosys shares worth Rs 2,000 crore

| | Updated on: Jul 13, 2012
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Raises stake to 6.3% in June quarter even as FIIs cut holding

LIC has hiked its stake in Infosys to a record high level of 6.3 per cent with purchase of shares worth an estimated Rs 2,000 crore in the first quarter of the current fiscal.

Life Insurance Corp of India, one of the biggest investors in the Indian stock market, saw its holding in the IT major rise from 4.9 per cent to 6.3 per cent during the quarter ended June 30.

Against the current

Based on the average market price during the period, the increase in LIC’s Infosys holding could be worth more than Rs 2,000 crore.

LIC is the largest non-promoter shareholder of the company.

LIC hiked its stake in Infosys even as a number of foreign investors pared their holding in the IT company — which has been known as the bellwether stock in the Indian IT space till recently, but is now facing growing concerns about its future growth prospects.

Infosys shares fell sharply on Thursday after the company disappointed with its first-quarter results and the weakness was seen continuing in the stock even on Friday morning.

The stock was down 0.7 per cent at Rs 2,250 at the BSE in mid-day trade, as against a 52-week high of Rs 2,990 on February 22.

FIIs sell Rs 1,500 cr

The overall FII holding in Infosys fell from 39 per cent to nearly 38 per cent during the last quarter, although major investors such as Aberdeen, Oppenheimer, Franklin Templeton, Vanguard and Singapore Government’s investment arm raised their stake marginally in the Indian IT firm.

Among the major overseas investors (those holding at least one per cent), only Abu Dhabi Investment Authority pared its stake, that too very marginally from 2.12 per cent to 2.08 per cent. However, all the FIIs together are estimated to have sold shares worth about Rs 1,500 crore during the quarter.

Concerns are being raised about Infosys’ growth prospects for two quarters now, but LIC appears to be keeping its faith in the company, market observers said.

Barring the last quarter of the previous fiscal ended March 31, LIC has been mostly raising its stake in Infosys for many quarters now.

LIC had made its first investment in Infosys way back in 2002, when its holding was nearly two per cent. Since then, LIC’s stake has been continuously rising in Infosys and had crossed five per cent mark last year and then rose past six per cent level during the last quarter.

Published on July 13, 2012

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