Life Insurance Corporation of India (LIC) has added over 60 lakh shares of Reliance Industries (RIL), India’s largest private sector firm, to its kitty in the third quarter ended December. Though the value of the purchases is not known, the state-run insurer would have invested Rs 700-900 crore for buying the shares from the open market, said market sources.
In the December ended quarter, the share price of RIL had fluctuated between Rs 1907.25 and Rs 930. At the minimum price of Rs 930, LIC would have spent Rs 560 crore for increasing its holding. Considering the highest price of Rs 1907.25, the cost would be Rs 1,145 crore. The buy would cost LIC Rs 770 crore at the average share price of Rs 1289.03 in the October-December period.
Despite the share purchase in the third quarter, LIC’s stake in Mukesh Ambani-led firm has come down to 5.37% compared to 5.4% in the previous quarter, thanks to the conversion of 12 crore preferential warrants into equity shares by the Ambani.
The warrant conversion, which cost over Rs 15,000 crore for Ambani, helped the promoters increase their stake to 54.76%, which includes 49.03% with voting rights and 5.73% with no voting rights.
Resultant to the expansion of equity base, the share of other stake holders including LIC has fallen.
As per December 2008 shareholding pattern of RIL, LIC is holding 8.45 crore shares. LIC had bought over 46 lakh shares of RIL in the second quarter, which helped the insurer to increase its stake to 5.4% from 5.08% in the previous quarter.
LIC had invested Rs 23,000 crore in the equity market until October of this financial year. It had plans to invest Rs 17,000 crore more to complete its total investment for the fiscal.
For the quarter ended December 31, promoters of RIL hold 771,698,164 shares amounting to a 49.03 per cent stake in the company, while in the September quarter they had 651,258,164 shares, a 44.80 per cent stake.
On the Bombay Stock Exchange, RIL scrip touched an intra-day high of Rs 1,154.40, up 6.79% from its previous closing price.
