INSUBCONTINENT EXCLUSIVE:
Life Insurance Corporation (LIC) appears to have revamped its investment strategy on Dalal Street if its June quarter portfolio tweaks are
any indication.
The insurance behemoth invested in some lesser-known companies through the quarter even as it exited form well-known names,
portfolio underperform the benchmark BSE Sensex index over the past year, mainly because of investments it had made over the years in some
weak public sector companies every time the government went for share sale.
LIC was busy shopping all through the April-June period, as the
broader market witnessed a lot of weakness and stocks across sectors slipped to attractive valuations.
The insurer bought shares from across
sectors, including banks, rating agencies, logistics, metals and mining, cement, oil marketing companies, power as well as chemicals.
What
really surprised analysts and markets watchers was sudden appearance of its name among shareholders of lesser-known companies such as
previous quarter.
Paisalo Digital, formerly SE Investments, is a non-deposit taking non-banking financial company
Williamson Magor is also an NBFC and its business activities include investments, lending and providing rent, maintenance and management
consultancy services.
LIC also held over 2 per cent stake in Federal-Mogul Goetze (India) and GSK Consumer Health at the end of June
It was not among the key shareholders at the end of previous quarter.
On the other hand, the insurer reduced its holding in more than 30
firms during the quarter, including some key names such as Nalco, Tata Power, Uco Bank, Allahabad Bank and even IDBI Bank, the PSU lender it
end of June from 10 per cent at the end of March quarter.
It also lapped up shares in two-wheeler major Hero MotoCorp, raising its stake to
6.36 per cent from 3.5 per cent
Hero MotoCorp has increased its lead over rival Honda Motorcycle and Scooter India (HMSI) in the first quarter of this financial year.
Data
released by the Society of Indian Automobile Manufacturers (SIAM) showed Hero MotoCorp sold 20,60,342 bikes and scooters during the
April-June period compared with 16,90,423 units sold by HMSI.
In the April-June quarter of last financial year, Hero had sold 18,11,343
units compared with 14,78,478 units for HMSI
Hero MotoCorp is also among top picks of HDFC Securities in auto OEM space.
LIC also bought shares in HCL Technologies, Hindustan Unilever,
Hindustan Petroleum Corporation and Ultratech Cement.
HUL last week posted a 19.17 per cent rise in June quarter net profit at Rs 1,529
crore on strong volume growth and sustained margin improvement
The company had posted Rs 1,283 crore profit for the April-June period a year-ago.
Some brokerages have raised target prices for the FMCG
stock following June quarter earnings, while others have downgraded it, citing expensive valuations.
Top brokerages such as CLSA, Edelweiss,
HSBC, ICICIdirect and Motilal Oswal have increased target price on the stock by 4-18 per cent
However, Antique Stock Broking, Nomura and Jefferies have downgraded it.
UltraTech Cement on Wednesday beat Street estimates and reported Rs
598 crore profit for June quarter.
HCL Technologies on July 18 said it has completed a $330 million acquisition of US-based Actian
rating on the stock, with price targets of Rs 1,175 and Rs 1,060, respectively.
In all, LIC hiked stakes in over 25 companies in Q1, data
available with Ace Equity till July 17 showed
The insurance behemoth has stakes in more than 250 companies listed on the National Stock Exchange (NSE).
The insurance firm hogged
limelight this month after it announced plans to enter the banking space by buying a controlling stake in the debt-stressed IDBI Bank
It currently holds 7.98 per cent in the bank compared with 10.82 per cent as on March 31, 2018.
