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The value of equity holdings of the nation’s financial powerhouse LIC has crossed USD 77 billion (Rs 5.7 lakh crore) by the end of the September quarter which is a shade below its record holding of USD 84 billion in the March 2018 quarter, rallying over 40 per cent in the first half, says a report.
But since the second quarter, the market has rallied around 13 per cent which could have increased the value of LIC’s portfolio if not in as many percentage but considerably.
According to a weekend note by Kotak Institutional Securities, in the March 2000 quarter, the value of LIC’s holdings was a pale of this at USD 4 billion when the BSE market capitalisation was only USD 102 billion and this touched USD 59 billion in March 2010 when the mcap was at USD 1.14 trillion.
Since then it was steadily rising with LIC’s stake touching a record of USD 84 billion in March 2018 while the mcap rose to USD 1.67 trillion. The mcap peaked to USD 1.8 trillion in March 2019 and LIC owned USD 81 billion of that and at USD 1.77 trillion, LIC’s ownership is at USD 77 billion, says the report.
At the end of the second quarter, the holdings by foreign portfolio investors, including ADRs and GDRs, in the BSE-200 Index rose to USD 415 billion from USD 360 billion in the first quarter. The BSE 200 Index accounts for 84 per cent of the country’s market capitalisation.
During the quarter, FPIs pumped Rs 46,900 crore into the market, says the brokerage, taking the FPI ownership in the BSE-200 index to 23.3 per cent.
LIC’s holdings
As against this, domestic institutional investors’ holdings in the BSE-200 Index slipped to 13.6 per cent in Q2 from 14 per cent in Q1, as they sold shares worth Rs 63,500 crore since April.
As of July-September, the value of LIC’s holdings in top 200 stocks stood at USD 77 billion.
Between October 1 and December 4, the market has rallied around 13 per cent to 45,079 and if the value of LIC’s holdings has risen in line with the markets, the value of its portfolio should be around USD 87 billion--a record high over the previous record of USD 84 billion in March 2018, according to the Kotak report.
In March 2020, when the markets were at a low having lost over 35 per cent to the pandemic scare, the value of LIC’s equity holdings plunged to USD 55 billion--the lowest in six years.
During the first half of FY2021, value of LIC’s holding surged over 40 per cent, or by USD 22 billion to USD 77 billion and LIC is said to have pumped Rs 55,000 crore into the equity market since April, as against Rs 32,800 crore in the year-ago period.
On December 4, the Sensex scaled past the 45,000-mark for first time closing at 45,079.55 after rising to 45,148.28 intra-day, while the Nifty closed at a new high of 13,258.55.
During July-September, LIC increased its holdings in Yes Bank to 5 per cent from 1.6 per cent in the first quarter (Q1), in HDFC AMC it rose to 2.8 per cent from zero in Q1, in Mahanagar Gas it rose from 1.6 per cent to 4.2 per cent, in Ramco Cement it increased up from nil to 2.6 per cent. In Container Corporation, LIC more than doubled its stake from 2.1 per cent to 4.4 per cent, in Alkem Laboratories it picked up 2.3 per cent stake from nil.
In the meanwhile, LIC pared its stake in Bank of Baroda from 3.3 per cent to zero and in Dr Reddy’s Labs it halved from 4.2 per cent to 2.2 per cent and so it did with Cipla from 4.2 per cent to 2.5 per cent, and exited its 1.7 per cent holding in GMR Infrastructure and 1.4 per cent in Bayer Cropscience.
In Britannia Industries it pared from 4.6 per cent to 3.3 per cent, in ICICI Bank from 8.3 per cent to 7.3 per cent and so it did in Tata Power from 7.1 per cent to 6.1 per cent.
Similarly, it pared its stake in Bharat Electronics to 2.3 per cent from 3.3 per cent, from 3.9 per cent to 2.9 per cent in GSPL, from 7.1 per cent to 6.2 per cent in Gateway Distriparks, from 4.7 per cent to 3.8 per cent in Wipro. In Indiabulls Housing it cut the stake from 10.7 per cent to 9.9 per cent, and Vedanta from 6.4 per cent to 5.6 per cent, according to the report.
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