NEW DELHI: Biggest India bull Life Insurance Corporation of India (LIC), which is the largest domestic institutional investor on Dalal Street, has raked in a notional profit of about Rs 80,000 crore in the last 50 trading sessions.
During the period, around 110 stocks in LIC‘s portfolio have given double-digit returns with microcap stock Gokak Textiles giving 204% return. Other top Q3 performers include Industrial Investment Trust, Orient Green Power Company, Adani Total Gas, BSE, Spencer’s Retail, The New India Assurance Company, Swan Energy and Power Finance Corporation.
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While LIC owns hundreds of stocks in its equity portfolio, details are available only on 260 stocks in which the PSU owns at least 1% stake. For the sake of this exercise, we excluded counters that are not currently traded on exchanges.
Considering publically-available data with bourses, LIC’s equity portfolio has risen by about Rs 80,300 crore to Rs 11.7 lakh crore now. At the end of the September quarter, LIC’s equity portfolio was estimated to be worth around Rs 10.9 lakh crore, shows ACE Equity data.
So far in the quarter, Nifty is up 6.5% during the period while LIC’s portfolio has rallied 7.36%.
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Top stocks in LIC portfolioIn terms of its market value, Reliance Industries (RIL) remains LIC’s biggest bet on Dalal Street. LIC’s 6.27% stake in RIL is now worth about Rs 1 lakh crore.
Other top bets include ITC (Rs 86,000 crore), TCS (64,000 crore), HDFC Bank (Rs 54,000 crore), L&T (Rs 51,000 crore), Infosys (Rs 51,000 crore), SBI (Rs 48,000 crore), ICICI Bank (Rs 42,000 crore), IDBI Bank (Rs 35,000 crore) and Axis Bank (Rs 28,000 crore).
What should investors do?With equity indices being at record high levels and retail exuberance in small and midcap stocks, market experts are suggesting investors to tone down expectations in the near term.
“We are trimming our positions. We are not taking any fresh bet that is for sure. Corporate earnings need to catch up to the elevated price earnings multiples, which we are seeing just now. We would like to see some compression in these price earnings multiples before we can commit more funds to equities,” said Dipan Mehta of Elixir Equities.
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Last month data shows mutual funds raised exposure primarily in financial services and auto, whereas outflows were visible in the IT sector.
In the past three months, ICICI Bank has seen the biggest inflows by MFs, followed by Reliance Industries, while SBI has witnessed the biggest outflows.
“The short-term undercurrent of the market is bullish despite the high valuations. The growth momentum in the economy, the sustained buying by DIIs and retail investors, reversal of the FPI strategy from selling to buying and favourable global cues will keep the market resilient,” said Dr. V K Vijayakumar of Geojit Financial Services.
