In January 2014, Life Insurance Corporation of India (LIC) made a significant investment in State Bank of India (SBI)'s qualified institutional placement (QIP) at about Rs 1,600 a share. Though it was criticised for bailing out the issue at a time when foreign investors stayed away, LIC has had the last laugh, with the stock more than doubling in value before cooling down.
Its stake in the bank, which had touched 14.99 per cent after the QIP, was worth Rs 21,463 crore in March last year.
The insurance behemoth has been booking profits at higher levels, as the SBI stock has risen significantly, touching a high of Rs 334 in January this year (a split of 1:10 meant an investment of Rs 1,600 in each share was worth Rs 3,340 at that point).
At the end of March this year, LIC's 11.82 per cent stake in SBI was worth Rs 23,572 crore. In terms of value, SBI is the insurer's fourth-largest holding.
LIC also struck gold in the Coal India offer for sale (OFS) earlier this year. Buying about four per cent in the government disinvestment programme in February, the insurer raised its stake to 7.24 per cent at the end of March. At Monday's close of Rs 394.3, Coal India was valued at 10 per cent higher than the OFS price of Rs 358. During this period, the benchmark Sensex has lost 2,300 points, or eight per cent.
Contrarian picks such as these helped the insurance behemoth boost its portfolio size by about a fifth to Rs 4.14 lakh crore at the end of March this year. This is the first time it has ended the year with assets of more than Rs 4 lakh crore, according to an analysis of data provided by NSEinfobase.com for the past six years.
From about Rs 2.7 lakh crore in March 2010, LIC's investment portfolio has grown by a half.
The data is the aggregate of LIC's stake in 309 companies in which it holds more than one per cent. As companies don't have to disclose the names of investors holding less than one per cent, LIC's holdings in companies below this limit isn't available in the public domain.
Yet, LIC's equity portfolio is higher than the equity holdings of the entire mutual fund sector, which comprises some 45 fund houses (Rs 3.5 lakh crore).
The top 10 holdings of the insurer account for Rs 2.05 lakh crore, or about half the total holdings. Four of these - ONGC, Coal India, SBI and NTPC - are state-owned enterprises. Five companies without any dominant shareholder or promoter - ITC, Larsen & Toubro, ICICI Bank, Axis Bank and Infosys - also make it to the top 10, with ITC topping the list. LIC's 14.41 per cent stake in the Kolkata-based ITC was worth Rs 37,636 crore, followed by holdings in L&T and Reliance Industries.