LIC Reduces Stakes In NMDC And TIL.
With 25% of its corpus set aside for equity investments, the state-owned insurance company LIC is one of the major domestic institutional investors.
According to a regulatory filing, the state-owned Life Insurance Company (LIC) sold 2% of the equity position in NMDC, bringing its overall ownership in the public sector company to 11.69%. The insurance behemoth reported that between December 29 of last year and March 14 of this year, at an average price of ₹119.37 per share, its ownership in the public sector entity fell from 13.69% to 11.69%.
The Corporation’s ownership in NMDC Ltd has been reduced from 40,14,72,157 equity shares to 34,25,97,574 equity shares, lowering its shareholding from 13.699 to 11.690 percent of the company’s paid-up capital, according to a statement from the state-owned insurer.
More than 5.88 crore shares, or 2% of the total, were sold on the open market, earning LIC more than 700 crores. In March, LIC announced a 27-fold rise in quarterly earnings because of modifications to its accounting practices.
The increase in premium income and the transfer of ₹5,670 crore into a shareholders’ fund because of the change in accounting rules caused LIC’s profit to soar to ₹6,334 crore. In the quarter, net premium income increased by 14.5% to ₹1.12 lakh crore. The insurer, which relies heavily on an army of agents, reported that the number of policies sold in the nine months that ended on December 31 increased by about 2% year over year to 129 lacks.
Its solvency ratio, a metric used to assess an insurer’s power to pay the long-term debt, increased from 1.77 to 1.85 a year earlier. The gross value of the new business (VNB), a key indicator of growth for the company that reflects projected profit from new premiums, was ₹7,187 crore, with VNB margins coming in at 19.1%.
The business of NMDC.
The market capitalization of NMDC, which operates in the industrial minerals sector, is ₹34,288.09 crore. Together with diamond mining, NMC also operates in the exploration and production of iron ore, the manufacturing and sale of sponge iron, and the generation and sale of wind energy. With three completely automated mines, two in Chhattisgarh and one in Karnataka, NMDC is now producing around 35 million tonnes of iron ore, making it the single largest producer of iron ore in India. The Government of India controlled 60.79% of the corporation as of December 31, 2022.
LIC sold stakes in TIL.
Along with NMDC, LIC has reduced its earlier 10.1% shareholding in TIL Ltd to 8% now. 2.12 lakh shares were sold by the corporation in the open market, earning it Rs 3 crore. The business added that the shareholding in TIL Ltd has decreased from 10,22,985 to 8,10,038 equity shares, bringing its shareholding down from 10.199% to 8.076% of the paid-up capital.
The business of TIL.
TIL is involved in the production and marketing of a wide array of solutions for material handling, lifting, ports, and road building. The only division of the business is Materials Handling Solutions (MHS). The Materials Handling Solutions division makes and markets a range of material handling tools, including mobile cranes, self-loading truck cranes, port instruments, and tools for building roads. The firm has two production plants in West Bengal: Kamarhatty and Kharagpur.
The business of LIC.
With 25% of its corpus set aside for equity investments, the state-owned insurance is one of the major domestic institutional investors. As of December 2022, LIC is responsible for managing a portfolio of assets of roughly 44.34 lakh crore. During the nine months that ended December 2022, the yield on investments made with policyholders’ funds—excluding unrealized gains—was 8.58%.
The losses of LIC as a result of the crash of Adani equities.
After a sharp decline in share prices, the insurer has recently been under scrutiny for its equity exposure to Adani group equities. Investments made by LIC in Adani equities were briefly on the verge of a notional loss but have now recovered. According to the disclosures filed to the markets, the entire equity investment value of LIC in the Adani Group is ₹30,127 crore or less than 1% of its total book value. Following Adani group companies are stake-owned by the insurance.
- Adani Enterprises.
- Adani Ports.
- Adani Total Gas.
- Adani Transmission.
- Adani Green Energy.
- ACC and Ambuja Cement.
Are the optimistic words by the LIC officials paving the hope toward market stability?
The Adani Group and LIC’s senior managers recently met to discuss problems with the conglomerate. Following the meeting, LIC Chairman MR Kumar declared himself to be more optimistic about the business potential of the Adani group.
Edited by Prakriti Arora
