Leading with HUL, LIC bets big on consumer demand

ET Intelligence Group: India’s biggest institutional investor Life Insurance Corporation (LIC) is betting on consumer-facing companies, show BSE data for the March 2020 quarter.The insurer invested close to Rs 13,000 crore based on average quarterly prices in prominent companies including Hindustan Unilever (HUL), Tata Consumer Products, Mahanagar Gas (MGL), Havells India, Amara Raja Batteries and TVS Motor Company. LIC raised its stake in the range of 0.7-2.6 per cent during the quarter.Among the consumer companies, HUL has turned out to be a bigger bet for LIC. Its holding in the country’s largest consumer goods company increased to 2.6 per cent in the March quarter. The insurer does not figure in HUL holdings data for the previous quarter. The BSE filings show names of shareholders with at least 1 per cent holdings in the respective companies. So, had LIC held a stake below 1 per cent in HUL in the previous quarters, it would not reflect in the filings.The latest stake purchase also makes LIC the largest domestic institutional investor in HUL. Domestic mutual funds and insurance companies held 2.9 per cent and 3.4 per cent stake in HUL, respectively, at the end of March 2020. Most institutional investors are underweight on the HUL by 1.6-2.9 per cent compared with the stock’s weight in the BSE- 200 index.76206123The holding in HUL accounts for 3.0 per cent of LIC’s total equity portfolio and ninth biggest by value, according to NSEinfobase. HUL’s superior earnings growth compared with the Nifty 50 and tailwinds from synergy benefits due to the merger with GlaxoSmithKline Consumer Healthcare may have attracted LIC. Among other consumer companies, LIC holds 2.9 per cent, 2.8 per cent and 6.1 per cent stakes in Nestle India, Asian Paints and Britannia Industries, in that order.LIC’s assets under management in the BSE-200 companies (where it holds more than 1 per cent stake) dropped by 32 per cent to $55 billion in the March quarter from $82 billion in the previous quarter, according to Kotak Institutional Equities.

from Economic Times https://ift.tt/3dEJEre