As the momentum in shares of Maruti Suzuki continues, with the stock touching a new record high on Thursday, Life Insurance company (LIC) seems to have made cashed in on the rally witnessed in the stock since the last two years.
Between May 2013 and July 2015, in which the stock has risen 2.5 times, LIC has consistently brought down its holding in the automaker from 8.25% to 6.22%, shows a filing on the Bombay Stock Exchange (BSE).
As such, LIC has consistently brought down its holding in as many as 12 companies from BSE 200 universe, including Maruti during the last one year. While PSUs such as State Bank of India and BPCL featured in the list, three multinational companies are also part of this sample.
The insurance behemoth seems to be booking profits at higher levels. Not only have most of these stocks gained well over 15% apiece, as many as ten counters have also hit their record highs in the last three months.
While share prices of Bajaj Finserv almost doubled in the last one year, the market value of Tata Chemicals Cipla, Cummins India, BPCL, Maruti Suzuki and Cadila Healthcare increased anywhere between 48% to 68% during the same period. The benchmark sensex gained only 6% in the same period.
The state-owned insurance giant holds 16.49% in L&T, its highest ownership amongst Sensex firms. In the last one year, the insurer has trimmed stake extensively in companies like Bajaj Holdings, State Bank of India, Tata Chemicals, Cipla and BPCL. While the holding in Bajaj Holdings almost halved to 3.84% in June 2015, that in others have seen a reduction between 1.5 ppt to 2 ppt.
Separately, LIC has trimmed its holding in UCO Bank aggressively from from 14.36% to 11.46% during April-June quarter at a time when the shares of PSU bank has lost 17% of their value. However, the institutional investor has increased its holdings in other PSUs such as Canara Bank by (7.72 ppt), Rural Electrification Corp (2.97), Bank of Baroda (2.24) in the three months to June 2015.