LIC cannot increase stake in 18 Nifty companies

According to Insurance regulator IRDA, any life insurance company cannot hold more than 10% stake in a particular company. Its implications is that the big boy of Indian stock market LIC (equity investments of over Rs 2 lakh crs) will not be able to increase its stake in 18 out of the 50 Nifty companies. LIC’s stake in these 18 companies are as follows:

ABB – 12.86%

ACC – 17.48%

Ambuja Cement – 11.25%

Axis Bank – 10.36%

BPCL – 9.88% (which is pretty much close to 10%)

Cipla – 13.49%

GAIL – 9.98%

Grasim – 12.75%

Hindalco – 10%

ITC – 13.98%

L&T – 17.38%

Mah & Mah – 17.61%

Maruti Suzuki – 14.64%

Reliance Infra – 13%

Siemens – 13.26%

Tata Motors – 10.27%

Tata Power – 11.44%

Tata Steel – 11.56%

LIC have little room to increase its stake in ICICI (9.38%) and Tata Communications (9.21%). The life insurance major has NIL exposure to DLF, NTPC, Reliance Power, Sun Pharma and Suzlon Energy. In the first three stocks, promoter’s holding is 85% or more as on 31st Dec’08. Fresh money could be deployed in Bharti Airtel, BHEL, Cairn, HDFC twins, Idea Cellular, PNB, RIL, SBI and Sun Pharma.

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One response to “LIC cannot increase stake in 18 Nifty companies

  1. As expected, LIC has increased its stake in Bharti Airtel, BHEL, HDFC twins and SBI (9.56% which is close to 10%) in the March quarter.

    No change in Idea Cellular holdings though.

    LIC will have no option but to invest a major portion of its fund in mid-caps in FY10.

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