During the March quarter, when Indian stock markets were falling sharply, Life Insurance Corporation of India (LIC) invested around Rs 18,500 crore, or nearly $2 billion, into the stock market. Instead of selling during the market weakness, LIC increased its holdings in several companies whose shares had fallen heavily.
During the March quarter, when Indian stock markets were falling sharply, Life Insurance Corporation of India (LIC) invested around Rs 18,500 crore, or nearly $2 billion, into the stock market.
Instead of selling during the market weakness, LIC increased its holdings in several companies whose shares had fallen heavily, according to a report by The Economic Times, citing Prime Database data.
LIC bought shares in 10 major companies, following a contrarian investment strategy. This means the insurer invested when market sentiment was weak and investors were nervous.
Many of the stocks LIC bought had declined between 10 percent and 30 percent during the period.
Some of the major companies where LIC increased its stake included Bajaj Finance, Bharti Airtel, and Tata Consultancy Services (TCS).
The government-owned insurer bought Bajaj Finance shares worth Rs 2,167 crore. The stock slumped over 19 percent in the March quarter.
LIC bought Bharti Airtel shares worth Rs 2,153 crore. The stock slumped over 15 percent in the last quarter.
TCS shares worth Rs 2,153 crore were bought by the insurer during the period. TCS stock had slumped over 26 percent during January-March.
While LIC bought shares of Cipla worth Rs 2,068 crore, it invested Rs 2,044 crore in Indian Railway Finance Corporation (IRFC).
Cipla and IRFC declined 19 percent and 30 percent, respectively, during the last quarter.
Shares of companies like Hindustan Aeronautics and Hyundai were also bought.
LIC’s buying pattern suggests that it sees long-term value in these companies despite the recent correction in stock prices.
The insurer is known for making large investments during periods of market uncertainty.
At a time when foreign investors were cautious and the broader market was under pressure, LIC acted as a strong domestic institutional investor (DII). Its investments helped support market sentiment during the downturn.
The report said LIC was selective in its investments. While it increased exposure in some companies, it also reduced holdings in a few others.
Historically, LIC has often taken long-term positions during periods of market weakness and volatility.
