Business News: LIC takes stock-specific view

Ignores Irda directive capping holdings at 10%. The Insurance Regulatory and Development Authority directive capping a life insurer’s holding in a company at 10 per cent has had little impact on Life Insurance Corporation’s (LIC) investment decisions. While the public sector insurer has been permitted to hold on its stake in companies where the limit was breached, LIC is deciding on its investment based on the outlook on individual stocks. As a result, according to the data culled out by Business Standard, during the fourth quarter of 2008-09, the largest life insurer has marginally reduced its stake in at least 10 companies where the exposure was over 10 per cent. At the same time, it retained its stake in close to 10 companies (see table). And, in case of one company — Hindalco — it raised its stake from 8 per cent at the end of December 2008 to 10.42 per cent at the end of March 2009 and breached the 10 per cent ceiling.