Life Insurance Corporation of India (LIC), the largest institutional investor in Punjab National BankBSE -2.10 % with 13.93% stake will hold on to its investment as it has full faith in the bank.
LIC had increased its shareholding in Punjab National Bank from 12.20% to 13.93% in the third quarter ended December 2017.
“What happened at Punjab National Bank is an unfortunate event,” said VK Sharma, chairman, Life Insurance Corporation of India. “We will not reduce our stake,” he said.
As head of an institution, Sharma said he has full faith in the bank.
Shares of the scam hit bank has been falling since Wednesday. It has lost almost 15% in market value after bank reported fraudulent transactions worth Rs 11,400 crore at a Mumbai branch involving companies related to Nirav Modi and Mehul Choksi. LIC had invested in the QIP of Punjab National Bank in December 2017, when the bank had raised Rs 5,000 crore.
During the nine months ended December 31, 2017, LIC saw profit from sale of investments grow 38% to Rs 19,000 crore against ?13,000 in the same period a year ago.
LIC has upped its investment in equities. It has invested Rs 70,000 crore into equities in the first nine months of the financial year, higher than the annual target of Rs 50,000-60,000 crore.
During the period, LIC sold equities worth Rs 49,000 crore.
Among the large caps, LIC increased its holding in IT major Tata Consultancy Services.
“We have fund and we will have to invest,” said Sharma. “We are contrarian, our investment is not buying and selling but taking a long term view.”
LIC has invested large amount in the divestment of GICBSE -2.32 % Re and New India Assurance. It has invested Rs 6,000 crore in New India Assurance.“These are in line with our business and we understand and if Medicare clicks next 10-15 years will be the years of general insurance business,“ said Sharma.
LIC also increased holdings in Sun Pharma to 5.53% from 4.36%, BPCL to 3.46% from 2.43%. It also increased holdings in ONGC and Oil IndiaBSE -0.22 % to 9.23%and 11.27%, respectively, from 9.20% and 11.07% in the year-ago period.
It reported 19.47% growth in new business performance to Rs 99,783.33 crore. Its total premium was up 11.47% to Rs 2,23,854 crore for the nine months through December 2017 from Rs 2,00,818 crore a year ago.
