LIC reserves cash to bail out government share sales

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/lic-reserves-cash-to-bail-out-government-share-sales/articleshow/16377346.cms

 Life Insurance Corp, which was estimated to invest Rs 50,000 crore in equities this fiscal, has hardly invested a fifth of it with nearly half the year behind, leading to speculation that it is keeping the powder dry to bail out government share sales if investors turn their back on them. 

The insurer, which controls nearly four-fifths of the market, has invested about Rs 8,500 crore till date, said an official at LIC who did not want to be identified. Last year, LIC bought shares worth Rs 45,000 crore. 

LIC was the biggest buyer of government securities, including explorer ONGC, last year where it had to buy nearly all the shares on offer valued at Rs 12,000 crore. It also helped the government in re-capitalising state-run banks such as Punjab National Bank and Syndicate Bank and invested Rs 8,000 crore. It has also exceeded the 10% limit in most of the banks post this investment. 

Overseas funds pared stakes in the 40 biggest stateowned firms to an average 7.31% at the end of June, the lowest level since March 2009, Bloomberg data shows. The BSE PSU Index gaining 11% this year has trailed the benchmark Sensex which has advanced 16% this year.