While the stock market reacts to the downgrading of US by S&P, Life Insurance Corporation of India seems to be in an investing spree. In the last three days, LIC India has doubled stock purchases. In the past too, LIC India has been the Government’s tool to take care of a reeling stock market.
Since global turndown brings in pessimistic assumptions, not many companies are keen on coming up with their IPOs. So LIC India has been investing in the secondary market in these days. Currently the country’s biggest investor has stakes in L&T, Axis Bank and Grasim. It has increased its stake in Aurobindo Pharma above 5% by acquiring over 1.67 lakh shares. LIC India has invested around Rs 330 crore in the last three days. Compared to this it invested only Rs 120 crore in the first four months of this fiscal.
While LIC’s move can be welcomed as a stabilizing agent for the stock market, it is after all playing with the common man’s money. Now the question remains: Should the government put a cap on this seemingly limitless power of investing of LIC India?
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