LIC stares at falling value after gorging on public sector stock

In the case of Punjab National Bank (PNB), the life insurer’s holding almost trebled to 14.15% end-September, 2012 from 4.78% last year. However, PNB’s market cap fell by 5.5% to R28,480 crore in that period, with the stock price stock price coming off 12% year-on-year to R839.70. In this time, the BSE Bankex rose 21%, with HDFC Bank gaining 35%.The current price of PNB is R783.05.

Moreover, on Monday, Bank of India closed at R280 per share whereas in September 2011 the price was R315.6. LIC has upped its stake in BoI over the over the past year or so to around 12% at the end of September. In Indian Overseas Bank (IOB), LIC holds 10.33% — the stock ended Monday’s session at R80.80 whereas last year, the stock was trading at levels of above R90. LIC has also picked up some 10% of Central Bank of India and while the stock now trades at R78.45, a year back it was quoting at levels of R100.

Meanwhile, LIC’s market share of premiums has fallen from 63.5% at the end of March 2012, to 59.6% at the end of October 2012. In October, individual premiums for LIC fell 12% y-o-y compared with an increase of 9.5% in September.

In mid-May this

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