Life Insurance Corporation of India’s (LIC) holding in nearly 300 companies has come to all time low, a study by Primeinfobase.com revealed on Monday. However, value is at all-time high. Concurrently, holding of Mutual Fund (MF) in various companies also declined for fourth successive three-month periods.
The study comprises of 296 companies where LIC has holding of at least 1 per cent.
In these companies, the study said, LIC’s holding slipped to an all-time low of 3.66 per cent as on March 31 from 3.7 per cent as on December 31, 2020. “this was on account of profit booking by India’s largest institutional investor,” Pranav Haldea, Managing Director of PRIME Database Group said which hosts primeinfobase.com. The insurer held all-time high holding of of 5 per cent as on June 30, 2012.
However, value of the holding in rupee terms reached an all-time high of ₹7.24 lakh crore in quarter ending March 31, 2021. This shows an increase of 6.30 per cent over previous quarter. It may be noted that Sensex and Nifty rose by 3.70 and 5.10 per cent respectively during this period. LIC also continues to command a lion’s share of investments in equities by insurance companies (76 per cent share).
Holding of Insurance companies as a whole also declined to a 5-year low of 4.80 per cent as on March 31, 2021, down from 5 per cent as on December 31, 2020. However, in rupees value terms, it went up by 3.09 per cent from the previous quarter to an all-time high of Rs 9.48 lakh crores as on March 31, 2021.
MF investment, outflows
In order to analyse investment pattern of the mutual fund, the agency analysed shareholding patterns filed by 1,639 of the total 1679 companies listed on NSE (main board) for the quarter ending March 31, 2021. It found that holding of domestic Mutual Funds in companies listed on NSE also reduced to 7.23 per cent as on March 31 down from 7.42 per cent as on December 31, 2020. According to Haldea, holding of Mutual Funds has now declined for four consecutive quarters, after 24 quarters of continuous rise (from 2.81 per cent as on March 31, 2014,to 7.96 per cent as on March 31, 2021).
Net outflows by domestic Mutual Funds stood at ₹26,810 crore during the quarter, as retail investors booked profits. In rupees value terms, the holding of domestic Mutual Funds went up by 4.81 per cent to ₹14.30 lakh crores as on March 31 from ₹13.64 lakh crores on December 31, 2020.
On the back of decrease in holdings of Mutual Funds and Insurance companies, holding of Domestic Institutional Investors (DII), which includes domestic Mutual Funds, Insurance Companies, Banks, Financial Institutions, Pension Funds, as a whole, also decreased to a 10-quarters low of 13.03 per cent as on March 31 from 13.56 per cent as on December 31, 2020. Net outflows from DIIs stood at ₹23,124 crore during the quarter. In rupees value terms, DII holding went up to an all-time high of ₹25.75 lakh crore as on March 31, an increase of 3.27 per cent over the last quarter.