The value of equity holdings of the nation's financial powerhouse LIC has crossed $ 77 billion (Rs 5.7 lakh crore) by the end of the September quarter which is a shade below its record holding of $ 84 billion in the March 2018 quarter, rallying over 40 percent in the first half, says a report.
But since the second quarter, the market has rallied around 13 percent 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 $ 4 billion when the BSE market capitalisation was only $ 102 billion and this touched $ 59 billion in March 2010 when the mcap was at $ 1.14 trillion.
Since then it was steadily rising with LIC's stake touching a record of $ 84 billion in March 2018 while the mcap rose to $ 1.67 trillion. The mcap peaked to $ 1.8 trillion in March 2019 and LIC owned $ 81 billion of that and at $ 1.77 trillion, LIC's ownership is at $ 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 $ 415 billion from $ 360 billion in the first quarter. The BSE 200 Index accounts for 84 percent 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 percent.
As against this, domestic institutional investors' holdings in the BSE-200 Index slipped to 13.6 percent in Q2 from 14 percent 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 $ 77 billion.
Between October 1 and December 4, the market has rallied around 13 percent 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 $ 87 billion--a record high over the previous record of $ 84 billion in March 2018, according to the Kotak report.
In March 2020, when the markets were at a low having lost over 35 percent to the pandemic scare, the value of LIC's equity holdings plunged to $ 55 billion--the lowest in six years.
During the first half of FY2021, value of LIC's holding surged over 40 percent, or by $ 22 billion to $ 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 percent from 1.6 percent in the first quarter (Q1), in HDFC AMC it rose to 2.8 percent from zero in Q1, in Mahanagar Gas it rose from 1.6 percent to 4.2 percent, in Ramco Cement it increased up from nil to 2.6 percent. In Container Corporation, LIC more than doubled its stake from 2.1 percent to 4.4 percent, in Alkem Laboratories it picked up 2.3 percent stake from nil.
In the meanwhile, LIC pared its stake in Bank of Baroda from 3.3 percent to zero and in Dr Reddy's Labs it halved from 4.2 percent to 2.2 percent and so it did with Cipla from 4.2 percent to 2.5 percent, and exited its 1.7 percent holding in GMR Infrastructure and 1.4 percent in Bayer Cropscience.
In Britannia Industries it pared from 4.6 percent to 3.3 percent, in ICICI Bank from 8.3 percent to 7.3 percent and so it did in Tata Power from 7.1 percent to 6.1 percent.
Similarly, it pared its stake in Bharat Electronics to 2.3 percent from 3.3 percent, from 3.9 percent to 2.9 percent in GSPL, from 7.1 percent to 6.2 percent in Gateway Distriparks, from 4.7 percent to 3.8 percent in Wipro. In Indiabulls Housing it cut the stake from 10.7 percent to 9.9 percent, and Vedanta from 6.4 percent to 5.6 percent, according to the report.