The country's largest insurer, Life Insurance Corporation of India, has invested Rs40,000 crore in equity so far this fiscal, exceeding its total equity exposure of the last financial year.
The state-owned company's investment in stock markets every year is around 8-9 per cent of its total premium collection, the official said, adding, ''The banking sector remains appealing to us.''
LIC recently invested in three large companies, including State Bank of India, in view of ''an attractive valuation and good investment prospects''. The insurance giant picked up a 2.11-per cent stake in SBI for Rs1,484.12 crore, taking is total shareholding in India's largest bank to 9.16 per cent (4.94 crore shares).
It also acquired a further 2.86-per cent stake in Indian Overseas Bank (IOB), also a government lender, for Rs57.65 crore and 2.18 per cent in private firm Cummins India for Rs72.22 crore. LIC increased its stake in IOB to 9.96 per cent by purchasing additional shares worth Rs57.65 crore between 19 February and 3 March.
Cashing in on the current lower value of different stocks, LIC has increased its stake in as many as 11 firms so far this year through open market transactions worth a little more than Rs6,400 crore. The insurer has bought an additional 2.27 crore shares in ICICI Bank, increasing its total holding in the bank to 9.38 per cent.
LIC has also upped its stake in various other state-run banks in recent times.
These are the Union Bank of India (2.18 per cent), Oriental Bank of Commerce (2.60 per cent), Bank of India (1.63%), Canara Bank (1.21 per cent) and Punjab National Bank (0.38 per cent).
It also purchased 43.22 lakh shares Rs72.22 crore in engine manufacturer Cummins India. With this, LIC now has a 7.6 per cent stake in the company.
Analysts said with the market plunging from its peak level barely a year ago, domestic institutional investors are evincing interest in buying as they are attractive at existing levels.
LIC has been shopping heavily in state-run entities and at present its stake in the largest public sector lender SBI stands at 9.16 per cent against 4.58 per cent in December quarter.