LIC to take it slow in equity investments after bumper buy this year

STOCK MARKET - State-owned Life Insurance Corp of India (LIC) will likely slow stock purchases for the rest of the fiscal year after nearly doubling its equity market investments in the first half from a year earlier.

LIC, with assets of Rs 2,726,000 crore ($423.3 billion) as of end-September, had a target of investing Rs 50,000 crore in stocks through the year which ends in March.

During the first six months of that period, LIC’s stock market investments more than doubled from a year earlier to Rs 39,224 crore. As of end-November it had bought equities worth about Rs 44,000 crore, top executives said.

They added they would look at opportunities to take some profit off the table.

Powered by strong fund inflows, Indian markets have hit a string of record highs this year, with the main market index gaining nearly 24 percent year-to-date.

“We will sell wherever we have opportunity,” V.K. Sharma, LIC’s chairman, told reporters. “We are contrarians and market is at peak.”

The surge in LIC’s equity investments to date has been partly driven by the insurer subscribing to some of the stakes being sold by the Indian government in a clutch of companies as part of its asset sales programme.

Govt raises Rs 6,700 cr from 2% stake sale in ITC

India has sold a 2 per cent stake in consumer goods and cigarettes maker ITC Ltd, raising about Rs 6,700 crore ($995 million) for the government, three sources with direct knowledge of the deal said on Tuesday.

State-owned Specified Undertaking of Unit Trust of India (SUUTI), which owned 11.12 per cent of ITC as of end-December, pared the stake via block deals in the market, the sources said.

Life Insurance Corp (LIC), which typically invests heavily in government divestments, bought the stake, the sources added. While LIC is fully owned by the government, its financials are independent of the government's budget.

ITC shares rose as much as 5.5 per cent in early trade to a record high of Rs 292.15 after news of the sale.

Neeraj Gupta, the top bureaucrat looking after state stake sales, confirmed a deal had happened, but declined to give details. India plans to raise Rs 45,500 crore from asset sales in the year to March to help fund its fiscal deficit.(Read More)