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94% of LIC’s top equity holdings see deep cuts; Rs 2 lakh crore wiped out

Only 19 stocks in the LIC portfolio have managed to stay in positive on a year to date basis.

, ETMarkets.com|
Last Updated: Mar 23, 2020, 12.02 PM IST
Country’s biggest institutional investor Life Insurance Corporation of India (LIC) has taken a Rs 1.84 lakh crore hit so far this year on its equity portfolio as the coronavirus (Covid-19) pandemic has made a deep crack on a well-paved Dalal Street.

The Covid-19 outbreak has raised concerns over global as well as domestic economic growth. As a result, the benchmark BSE Sensex and NSE Nifty have tanked over 25 per cent each on a year-to-date basis till March 20.

Nearly 94 per cent of LIC’s top holdings witnessed drop in share prices in this market mayhem. Among them, Indiabulls Housing Finance, Reliance Capital and Videocon Industries have tumbled the most at 70 per cent each year to date. Among others, Reliance Home Finance is down 66 per cent, Reliance Power 66 per cent and Tata Chemicals 66 per cent.

The value of LIC’s holdings declined 30.46 per cent to nearly Rs 4.20 lakh crore as of March 20 from Rs 6.04 lakh crore as of December 31.

The total value of the portfolio was calculated on the basis of LIC’s latest holdings data available with stock exchanges. The insurance behemoth had over 1 per cent stake in 304 companies as of December 31.

Overall, the selloff has been unprecedented, and the benchmark indices have triggered lower circuit filters twice within a fortnight. Indian market has seen such automatic trading halts for the first time since the 2008 crash. On the way down, Nifty made a multi-year low of 7,832. The pain is evenly distributed between sectors and among leading stocks, suggesting an across-the-board selloff.

Sectorwise, banking stocks have seen the biggest dent, eroding nearly Rs 47,500 crore from the LIC portfolio. NBFCs including insurance firms in the portfolio have eroded Rs 15,000 crore, auto stocks Rs 11,685 crore and refiners Rs 23,909 crore.

“The auto industry in India has been facing one of the most severe challenges at the moment. On one hand, it is faced with the daunting task of meeting the stringent deadline of transitioning from BS-IV to BS-VI standards, and on the other hand the spread of the COVID-19 virus is hurting demand outlook. Covid-19 will have an immediate short-term adverse impact on the industry, due to a decline in incomes and slowdown in commercial activity,” Dolat Capital Market said in a report.

Geojit Financial Services said the fall in international bond yields indicates an increase in global financial and economic risk, which could be the highest concern for Indian banks.

Only 19 stocks in the LIC portfolio have managed to stay in positive on a year to date basis in this selloff.

Standard Batteries (up 105 per cent year to date), Alok Industries (up 83 per cent), Gujarat State Financial Corporation (up 46 per cent), The India Cement (up 37 per cent), Transpek (up 24 per cent) and Spencer’s Retail (up 16 per cent) are among top the stocks which have managed to cap the downside.
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