LIC stocked up Vakrangee, Dewan, Indiabulls Housing just before crash
Synopsis
LIC has also increased its holding to 11 per cent in Indiabulls Housing Finance.
“In the past three years, we have taken a conscious decision to invest only in the BSE200 companies. But you should know that LIC is an old institution and there are legacy investments about which there is nothing much we can do,” Hemant Bhargava, managing director, LIC, had told ET earlier this year.
Earlier, India’s largest fund had come under the radar of market watchers for its questionable judgement over investments in several stocks shortly before they crashed. These included shares of companies such as Vakrangee, Gitanjali Gems, Amtek Auto, Mandhana Industries, Electrosteel Casting and Opto Circuits.
In the aftermath of such an experience, it is surprising that India’s largest fund decided to invest in smaller companies in a downward trending market. LIC’s total investment in Indian equity is near Rs 6 lakh crore and these recently acquired stocks, totally near Rs 2,000 crore, won’t significantly alter the performance.
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Email queries sent to LIC seeking the investment rationale in these companies did not elicit any response.