Street signs: LIC pares holdings in PSBs

Shares of Religare Enterprises have gained 40% in the past fortnight after the financial services firm announced major changes to its board and management

India’s largest institutional investor Life Insurance Corporation (LIC) slashed its holdings in several public sector banks (PSBs) including State Bank of India (SBI) and Bank of Baroda (BoB) during the September quarter. In SBI, the stake has reduced by 231 basis points (bps), while in BoB it fell by 274 bps. Surprisingly, the sell-off came ahead of the bank recapitalisation announcement by the government, following which shares of PSBs skyrocketed by as much as 30 per cent. Market observers say the selling could be partly to create leg-room to participate in the fundraising plans of some of the banks.