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lic portfolio: LIC’s Rs 10 lakh crore-portfolio: 273 stocks, 11 stars, but only 1 superstar!

NEW DELHI: Spread across almost every nook and corner of Dalal Street, Life Insurance Corporation of India or LIC’s portfolio is humongous with Rs 10 lakh crore riding on as many as 273 stocks.

So far in the calendar year 2023, there are 12 stocks in LIC’s kitty that have delivered at least 20% return with ITC doing most of the heavy lifting because of the sheer size of investment.

ITC stock which has rallied nearly 30% so far in 2023 is LIC’s second largest bet in the listed space.

In terms of its current market value, India’s largest company by market capitalisation Reliance Industries (RIL) is the largest holding for LIC at Rs 1.06 lakh crore but the stock has given negative returns so far in the year.

In the case of ITC, the state-run insurer reduced its stake marginally by 2 basis points to 15.27% in the March quarter. As a result of the sharp rally, the market value of LIC’s investment in ITC has now surged to cross the Rs 80,000-crore mark from Rs 62,871 crore earlier at the end of December 2022.

IT bellwether TCS is LIC’s third largest holding at around Rs 52,600 crore, followed by SBI (Rs 44,500 crore), ICICI Bank (Rs 40,000 crore), L&T (Rs 38,000 crore), Infosys (Rs 38,000 crore), IDBI Bank (Rs 29,000 crore), HDFC and Kotak Mahindra Bank (Rs 24,000 crore each).

When seen in terms of biggest gain in percentage terms, PSU stock RVNL is the top performing stock in LIC’s portfolio in 2023. Amid the government’s heavy capex push, the stock has seen a one-way rally in the last few months. Other top performers include Kirloskar Electric, Aurobindo Pharma, Welspun India, Responsive Industries, Glenmark Pharma, Oil India, Siemens, Tata Motors, RITES and OFFS.

Besides ITC, among other large bets of LIC, L&T, ONGC, Tata Motors and Dr Reddy’s Lab have given double-digit returns.

As far as the 2023 performance is concerned, the only one stock that stands out in LIC’s portfolio is that of ITC. Having more than doubled in the last 2 years, the counter is also the best performer in Nifty and has long been a favourite of many value investors.

Now trading at all-time high levels, ITC’s near 3% dividend yield has been the cherry on the top. The Kolkata-based hotels-to-cigarettes major is due to announce its March quarter numbers and dividend on May 18.

Top buys and sells
During the March quarter, LIC raised investments in IRB Infra, Infosys, Asian Paints, RIL, Maruti Suzuki, TCS, Tech Mahindra Dr Reddy’s Lab, GAIL and Container Corporation of India, shows PRIME Database records.

On the other hand, LIC lowered its bet on NMDC, L&T, HUL, NTPC, HDFC, Ultratech Cement, Sun Pharma, UPL, Power Grid and Hindalco.

On an overall basis, LIC holding went up in 63 companies listed on NSE in the last one quarter and reduced in other 82 firms.

What should investors do?

Market insiders say the two biggest triggers for the market in the near term is the Q4 earnings season and FII flows. An interim review of the March quarter earnings by Motilal Oswal shows that financials and auto companies drove the earnings while downgrades were seen in IT majors.

“Among the Nifty constituents, Reliance Industries, Axis Bank, Kotak Mahindra Bank, HDFC, Bajaj Auto, Hero Motocorp, Nestle, and SBI Life Insurance have exceeded our profit estimates. Conversely, Tata Steel, Maruti Suzuki, Infosys, Tata Consumer, and HDFC Life Insurance have missed our profit estimates,” Motilal said.

Kotak Equities’ Sanjeev Prasad points out that most growth stocks, especially in the consumption, investment and outsourcing space, are trading at expensive valuations, despite increasing near-term demand issues and medium-term risks of disruption. “Financials remain reasonably valued and appear attractive in the context of a likely healthy credit cycle over the next 1-2 years,” he said.

(With data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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