Contrarian Bet on IT Sector
During the December quarter, LIC invested an estimated Rs 3,136 crore in Tata Consultancy Services (TCS) and Rs 2,293 crore in HCL Technologies. The insurer also significantly increased its holding in midcap IT firm Coforge, taking its stake from below 1% in September to 4.66% by December.
This buying spree pushed LIC’s IT sector exposure from Rs 1.82 lakh crore to Rs 2.17 lakh crore in just three months. The sector’s share in its overall portfolio rose from 11.32% to 12.43%.
The move stands out because IT stocks have corrected up to 30% from their recent highs, largely due to concerns that rapid advances in AI could compress margins and alter the outsourcing model.
Banks and Financials See Cuts
While increasing tech exposure, LIC reduced holdings in key financial stocks. The largest single sale was Rs 3,080 crore worth of State Bank of India (SBI) shares. It also offloaded Rs 1,528 crore in HDFC Bank and Rs 1,173 crore in Bank of Baroda.
As a result, the financial services sector’s share in LIC’s portfolio declined from 27.21% to 26.52%, though it remains the largest allocation at Rs 4.64 lakh crore.
Market observers say the insurer appears to be locking in gains in banking stocks after a strong run, while positioning for a potential recovery in technology counters.
Industrial and Metal Exposure Reduced
LIC also trimmed exposure to several industrial and metal companies. It reduced holdings worth Rs 2,442 crore in Larsen & Toubro and Rs 2,367 crore in Reliance Industries.
In the metals segment, the insurer sold Rs 2,307 crore in Hindalco and Rs 1,491 crore in Vedanta. Its stake in Steel Authority of India declined from 10% to 9.18% during the quarter.
Adani Ports also saw a reduction in stake from 7.73% to 6.79%, reflecting selective profit-booking across sectors.
Other Notable Additions
Beyond IT, LIC deployed Rs 2,942 crore in Sun Pharma, marking it as one of its largest purchases after TCS. The insurer also increased stakes in NMDC, Bajaj Auto and Coal India, signalling continued interest in public sector undertakings and domestic consumption-driven plays.
It raised exposure to Voltas, Dr Reddy’s Laboratories, Astral, Indian Overseas Bank, Exide Industries and JSW Energy as part of its broader rebalancing strategy.
On an aggregate basis, LIC increased holdings in 73 NSE-listed companies and reduced stakes in 90 companies during the quarter.
AI Concerns Drive Market Debate
The broader market remains divided on whether artificial intelligence will cause temporary margin pressure for IT companies or fundamentally disrupt the sector’s economics.
Industry analysts note that generative AI tools could automate certain services traditionally provided by Indian IT firms. However, others argue that AI will create new revenue streams and demand for advanced digital transformation.
LIC’s aggressive accumulation suggests it believes the current correction presents a long-term opportunity rather than a structural decline.
Long-Term Strategy at Play
LIC, which holds 283 stocks valued at Rs 17.83 lakh crore, remains India’s largest domestic institutional investor. The average stock price of companies where LIC increased exposure rose just 0.14% during the quarter, indicating a longer investment horizon rather than short-term trading.
Market participants often track LIC’s moves closely, as its portfolio decisions can signal broader institutional sentiment.
For official updates on LIC’s financial disclosures and regulatory filings, investors can refer to the corporation’s official portal at https://licindia.in and stock exchange filings via https://www.bseindia.com.
Will the Bet Pay Off?
Whether LIC’s contrarian bet on IT pays off will depend on earnings recovery and how quickly companies adapt to AI-led transformation. If technology firms demonstrate resilience and innovation, the insurer’s bold shift could yield significant long-term gains.
For now, the portfolio realignment underscores LIC’s willingness to move against prevailing market sentiment reinforcing its reputation as a patient, long-term investor in India’s evolving economic landscape.
