LIC’s Portfolio Takes a Hit – Massive ₹84,000 Cr Loss

The Life Insurance Corporation of India, well known as LIC, has suffered a major decline in the value of its equity holdings, with a drop of approximately ₹84,000 crore over the past one and a half months. As of December 2024, LIC’s investments in listed companies were valued at ₹14.72 trillion, but this had declined to ₹13.87 trillion as of February 18, 2025, marking a mark-to-market loss of ₹84,247 crore or 5.7%.

This reflects the widespread market volatility. The study analysed 330 companies where LIC held over a 1% stake during the October-December 2024 quarter. Collectively, these companies accounted for 66% of the total market capitalisation of all BSE-listed companies.

What Caused the Decline?

LIC has experienced a market value decline of over ₹1,000 crore in 26 companies. In particular, the insurer’s holdings in Jio Financial Services,  Adani Ports & SEZ, HCL Technologies, Tata Consultancy Services (TCS), JSW Energy, HDFC Bank, and IDBI Bank have each depreciated between ₹2,000 crore and ₹4,000 crore.

A significant part of the decline results from a more than 10% correction in the share prices of Larsen & Toubro (₹6,713 crore), ITC (₹11,863 crore), and State Bank of India (₹5,647 crore) in CY25. These stocks have accounted for 29 per cent of LIC’s total value erosion.

Also Read: Mutual Fund AUM Hits Record High of ₹67.90 Lakh Crore in Sept 24

NBFCs, Insurance Firms Among Biggest Contributors to LIC’s Portfolio Dip

According to the report, non-banking financial companies (NBFCs) and insurance companies contributed significantly to the decline, accounting for Rs 18,385 crore, i.e., 22% of the total value decline in LIC’s portfolio over the review period.

Other sectors in which LIC lost over Rs 4,000 crore in value during the period are information technology (Rs 8,981 crore), power generation (Rs 7,193 crore), infrastructure (Rs 8,313 crore), and pharmaceuticals (Rs 4,591 crore).

On the other hand, Bajaj Finance, Kotak Mahindra Bank, Maruti Suzuki India, Bharti Airtel, JSW Steel, Bajaj Finserv, and SBI Cards have reinforced the trend by adding between Rs 1,000 crore and Rs 3,000 crore to LIC’s coffers. Reliance Industries Limited (RIL) and Tata Consumer Products added Rs 840 crore each.

Also Read: RBI Shocks Markets with Surprise Rate Cut to 6.25%!

LIC’s Challenges Persist Amid Market Volatility

Experts predict no early relief in LIC’s fortunes. They expect the markets to remain volatile despite occasional glimmers of hope, which could get sold into. HSBC, for instance, expects India’s valuation multiple to remain under pressure until earnings stabilise. They said the December 2024 quarter (Q3-FY25) results were below estimates, even amid lowered expectations.

They expect growth to continue underperforming for at least two quarters before the lower base or potential policy impact kicks in. They see downside risk to the consensus’s 15% growth expectations for calendar year 2025.

How LIC Mitigates Market Volatility to Protect Policyholders

LIC maintains a diversified investment strategy, covering government bonds and other secure assets, which helps minimise risks associated with equity market volatility even during these challenges. Policyholders must understand that such market-induced fluctuations in LIC’s portfolio are unlikely to impact the company’s ability to fulfil its financial obligations.

While LIC has suffered significant losses due to recent market corrections and particular declines in key holdings, its strong financial health and diversified investment approach continue to safeguard the interests of its policyholders.