India’s largest DII dumping midcaps & smallcaps, shifts focus to largecaps
LIC, the public sector insurance giant, offloaded shares, mainly midcaps and smallcaps.
Life Insurance Corporation of India (LIC), the public sector insurance giant, offloaded shares, mainly midcaps and smallcaps, across sectors – from cement and construction, real estate, engineering, gas transmission, generation to textiles.
Equity benchmark Sensex tumbled nearly 2 per cent during the period.
Latest shareholding data showed LIC increased stakes in several Sensex stocks, including the country’s major lenders HDFC Bank and Kotak Mahindra Bank.
LIC’s stake in HDFC Bank increased to 2.75 per cent at the end of September quarter from 2.52 per cent in the previous quarter ended June 30. Likewise, its stake in Kotak Mahindra Bank rose to 2.28 per cent from 1.95 per cent, shareholding data from corporate database Ace Equity showed.
Shares of HDFC Bank have rallied 14 per cent year to date till October 16, while those of Kotak Mahindra Bank risen 28 per cent. Sensex is up nearly 7 per cent in the same period.
IIFL Securities is positive on Kotak Mahindra Bank (KMB) with a price target of Rs 1,850. “KMB is well positioned versus its peers due to higher market capitalisation, a strong liability franchise and benign asset quality, which will allow it to gain further market share,” the brokerage said.
IT major Tata Consultancy Services (TCS) and mortgage major Housing Development Finance Corporation (HDFC) were among other Sensex companies in which LIC increased stake during the quarter gone by.
TCS last week reported a 1.8 per cent rise in consolidated net profit at Rs 8,042 crore for the quarter ended September 30, 2019. ICICI Securities has a ‘reduce’ rating on the IT major with a price target of Rs 1,855.
Among the companies that have reported their shareholding data so far, LIC held a stake in 150. That number will be much bigger once more shareholding data is made available. The DII had 310 stock in its portfolio at the end of June quarter.
In pharma, LIC raised stakes in Pfizer, Granules India and Cadila Healthcare, but cut holdings in Glaxosmithkline Pharmaceuticals. In gems & jewellery, it increased its stake in Rajesh Exports.
The domestic equity market was under severe selling pressure through much of September quarter amid sustained outflows from foreign institutional investors (FIIs), geopolitical tensions and a crippling slowdown in the domestic economy. FIIs offloaded more than Rs 22,000 crore worth in Indian stocks through July-September.
From other sectors, LIC increased stake in consumer good firms Voltas and Havells India, two-wheeler major TVS Motor and cement giant ACC.
TVS Motor Company on October 17 reported a 20.68 per cent year-on-year (YoY) growth in profit after tax (PAT) at Rs 255 crore compared with Rs 211.30 crore reported for the same quarter last year. The numbers included an exceptional gain of Rs 76 crore from reversal of NCCD provision for a Himachal plant pertaining to earlier years in pursuant of a favourable order from CESTAT.
In the NBFC space, LIC raised stake in HDFC to 4.05 per cent from 3.73 per cent at the end of June. It also hiked stake in Edelweiss Financial Services to 2.08 per cent from 1.14 per cent.
Among others, Indraprastha Gas, GAIL (India) and Hindustan Zinc also saw a rise in LIC holdings.
On the other hand, the insurance behemoth brought down its stake in Axis Bank to 9.44 per cent at the end of September from 10.37 per cent at the end of June. It also reduced stake in JK Lakshmi Cement (from 2.46 per cent to 2.43 per cent), MTNL (14.56 per cent to 13.62 per cent), Lakshmi Machine Works (7.34 per cent to 7.24 per cent) and Binny (2.03 per cent to 1.98 per cent).
Other companies where LIC sold shares during the quarter included Arvind Smartspaces, Simplex Realty, Crompton Greaves, Zydus Wellness, ABB India, GMR Infra, BHEL, Empire Industries and Tamil Nadu Newsprint.