LIC Invests Rs 8,000 Crore In Indian IT Stocks Despite Foreign Investors Dumping Them In Last Quarter

When compared to foreign investors, the April-June quarter saw Indian IT sector stocks witness a contrasting stance taken by India's insurance giant LIC.

Life Corporation of India (LIC) went on a shopping spree into uncharted territory, particularly in the fourth quarter.

In the June quarter, LIC made new investments in the IT sector worth thousands of crores. While analysts have become concerned about the sector, the country's largest life insurance has demonstrated its faith in the sector by investing Rs 8,000 crore in some of India's leading IT software firms.

According to a Prime database report, LIC invested Rs 3,636 crore in Infosys, Rs 1,973 crore in Tata Consultancy Services, Rs 1,468 crore in Tech Mahindra, and Rs 979 crore in HCL Technologies.

This comes as the Indian IT industry has struggled in recent quarters, with flat sales and profit growth spurred by fears of a recession in its major markets, the United States and Europe, as interest rates rise. For example, Infosys stock dropped more than 10% in early April after reporting lower-than-expected Q4 financial results (March quarter) and a bleak revenue outlook. It had emphasised the impact of financial upheaval in major economies such as the United States and Europe.

For the June quarter, insurance giant LIC recently reported a 14-fold surge in profit at Rs 9,544 crore in Q1 of FY24. It also sold shares worth Rs 1,932 crore in Bajaj Auto in that quarter, as per the report.

As per to a report, the June quarter, FIIs sold IT stocks worth over Rs 9,000 crore, with Infosys and Tech Mahindra being the least-liked stocks. TCS too saw a marginal quarterly drop in FII shareholding from 12.72% to 12.46%. The June quarter shareholding pattern data shows that FIIs pared their stake in Infosys by another 165 bps to 33.44%. In the case of Tech Mahindra, FII holdings went down by 118 bps to 25.69%.

Out of the 10 Nifty IT stocks, Wipro, which underwent a share buyback in June, and HCL Technologies are the only two counters where foreign investors saw some hope as their holdings went up marginally by 6-7 bps.