LIC's equity portfolio value takes coronavirus hit, down by Rs 1.7 lakh crore in March quarter

The ownership of Life Insurance Corporation (LIC) in listed Indian companies touched a record low of 3.88 per cent in the quarter ended March 2020. LIC's equity ownership was the highest on June 30, 2012 at 5 per cent. The coronavirus-related stock market sell-off resulted in the value of investments falling by more than Rs 1.7 lakh during the period, data by nseinfobase.com showed.

The value of equity portfolio of the public insurer (across 289 NSE-listed companies where its holding is more than 1 per cent) plunged from Rs 6.04 lakh crore as on December 31 to Rs 4.24 lakh crore as on March 31, a decrease of 29.38 per cent. NTPC, IGL, NHPC, Tata Chemicals, Bajaj Auto, Bank of India, Titan, Bharti Airtel, Canara Bank are some of the companies that constitute LIC's equity portfolio.

"LIC's ownership in listed companies declined in the fourth quarter of FY20 on account of coronavirus-related sell off. Shares in LIC's portfolio saw a steeper fall than those held by mutual funds," Pranav Haldea, MD, Prime Database Group, told BusinessToday.In.

The holding of domestic mutual funds in firms listed on NSE hit an all-time high of 7.97 per cent by value on March 31, 2020 up from 7.79 per cent on December 31, 2019, the data also showed. On account of an increase in holding of mutual funds, holding of domestic institutional investors (DII), including domestic mutual funds, insurance companies, banks, among others, also surged to a record high of 14.39 per cent by value on March 31 as against 14.06 per cent in the last quarter.

However, the holding of foreign portfolio investors (FPIs) declined from 20.24 per cent by value on December 31 compared to 19.12 per cent on March 31, 2020.

LIC is the country's largest insurer, controlling more than 70 per cent of the market share. The insurer has a market share of 76.28 per cent in number of policies and 71 per cent in first-year premiums. LIC has many subsidiaries. In the budget 2020-21, Finance Minister Nirmala Sitharaman had announced that the government is looking to sell stake in the public sector insurer via an initial public offering (IPO) during FY21. The government currently owns 100 per cent in LIC.

Listing of Life Insurance Corporation (LIC) may be delayed due to the weak market situation amid the ongoing coronavirus crisis, news agency PTI had recently reported. The government may currently find it challenging to sell stake due to muted market valuation and the same may be delayed beyond March 2021.

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