In line with the sharp rise in equity market gains in 2017, the market value of LIC portfolio across all NSE listed companies (where its holding is more than 1 per cent), stood at an all time high of Rs 6.26 lakh crore at the end of December 2017, witnessing an increase of 14.65 per cent over that in the previous quarter. The portfolio value grew 34 per cent over December 2016 when it stood at Rs 465,194 crore.
Data sourced from Prime Database shows that even as LIC’s portfolio value grew significantly, its overall ownership in NSE listed companies has come down over the last one-year from 4.54 per cent in December 2016 to 4.24 per cent in December 2017. This is lowest in 11-quarters as the previous low was in March 2015 when its ownership across NSE listed companies stood at 4.23 per cent.
By comparison, the holding of mutual funds in NSE listed companies has risen sharply from 4.83 per cent to 6 per cent in the same period as the value of MF holdings rose from Rs 4.94 lakh crore in Dec 2016 to Rs 8.86 lakh crore. Prime Database, however, said that while data of less than 1 per cent holding for insurance companies is not available, it is available for mutual funds.
In calendar 2017, the Sensex rose 28 per cent while the midcap and small cap indices at the BSE rose 48 per cent and 9 per cent, respectively.
Even as LIC’s gains in value of portfolio is mostly on account of rise in markets (as its overall holding percentage has come down), in the quarter ended December 2017 LIC held more than 1 per cent stake in 327 companies, which is the highest ever. While LIC increased its holding in 56 companies listed at NSE in the quarter ended December 2017, it reduced its holding in 78 companies. Data covers shareholding pattern of 1,599 companies that disclosed the same till Feb 7,2018.
“The average stock price return of the companies in which LIC reduced holding stood at 9.55 per cent during the quarter whereas the average stock price return in companies where it reduced holding in the same period was much higher 15.72 per cent,” said Pranav Haldea,MD, Prime Database.
During the December quarter, the company which saw maximum increase in shareholding by LIC is Indiabulls Housing Finance (increase from 4.275 to 9.02 per cent). Other companies that figure in top 10 list include Zee Entertainment, Union Bank of India, GIC Housing Finance and Punjab National Bank. This shows LIC’s bullishness on housing finance companies and public sector banks.
Among the top 10 companies where it saw highest reduction in holding are – Mastek India, Raymond and Bank of Baroda. The top three companies in which LIC has the maximum holding are LIC Housing Finance (40.31 per cent), Corporation Bank (18.91 per cent) and Mahanagar Telephone Nigam (18.81 per cent). In value terms, the top three companies in which LIC has the maximum holding are ITC (Rs 51,994 crore), Reliance Industries (Rs 45,871 crore) and Larsen & Toubro (Rs 31,012 crore).