State-run Life Insurance Corporation of India (LIC), a major domestic institutional investor, sold shares worth R12,600 crore (about $2.32 billion) in companies related to financial, auto and pharma sectors in the October-December quarter of the current fiscal.
At the same time, LIC acquired shares worth about R3,877 crore (about $714 million) in energy, metal and mining and software companies, the global research report by BofA-Merrill Lynch said.
LIC sold shares of private lenders — Axis Bank, HDFC Bank and ICICI Bank — drug major Sun Pharma and auto firm Mahindra & Mahindra, while bought shares of energy companies — Reliance Power, Cairn India and Reliance Industries — IT giant Infosys, and FMCG firm ITC, the report said.
“State-run LIC lowered its exposure to companies like Axis Bank (with sale of shares for an estimated $891 million), Mahindra & Mahindra ($177 million), HDFC Bank ($157 million), Sun Pharma ($154 million) and ICICI Bank ($145 million),” the report said.
On other hand, LIC’s major investment during the quarter included Reliance Power ($203 million), Infosys ($162 million), Cairn India ($150 million), Reliance Industries ($142 million) and ITC ($94 million).
The report said LIC has emerged as net sellers during October-December quarter and most of the pullout was from private sector companies.
Also, LIC was net seller during the July-September quarter 2012 with the insurer purchasing shares worth an estimated $1.3 billion (R7,020 crore) in India equities and selling shares to the tune of $436 million (R2,355 crore).
In terms of sectors, LIC sold shares valued at $1.45 billion in the finance portfolio during the three months ended December 31, 2012, followed by auto ($368 million), pharma ($325 million), industrial ($82 million), cement ($81 million) and chemicals ($7 million), the report said.
In contrast, the insurance giant’s investment in the utilities sector stood at $300 million, followed by $197 million in the energy category, $142 million in metals and mining space, $54 million in software and $21 million in the telecom area. Financial sector accounted for 24% of LICs total equity portfolio in the country followed by energy at 16%, consumer goods 13% and software 8%.
According to an estimate, LIC has lowered its holdings in as many as 27 of the 50 blue-chip firms forming the market benchmark index Nifty, selling shares worth an estimated R8,000 crore for the three-month period ended December 31, 2012.