Insurer says it’s awaiting right opportunities for bulk/block deals.
Life Insurance Corporation (LIC), one of the largest institutional investors in the Indian stock market, has become active on the bourses again. This is after a brief lull last month following the bribe-for-loan scam and questions around its stock market dealings.
However, the insurance major has not done a single bulk or block deal since November 16, according to data on websites of stock exchanges. This may be to avoid unnecessary public glare at a time it is trying to restore its image, say dealers.
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Bulk deals are transactions in which the quantity bought is more than 0.5 per cent of the number of listed shares of the company, while trade with a minimum quantity of 500,000 shares, or a minimum value of Rs 5 crore, executed in a single transaction, qualifies as a block deal. Both these have to be reported to the bourses on a daily basis.
“It’s almost business-as-usual for LIC’s daily stock market activity,” said head of institutional sales at a domestic brokerage, minutes after he punched an order from LIC. “On an average, the insurer may be doing 120-150 trades daily through its empanelled brokers. However, it is not doing any bulk deals right now,” he added.
The number of brokerages empanelled with LIC is estimated to be about 150.
There were media reports suggesting that the Securities and Exchange Board of India (Sebi) was scrutinising all bulk and block deals done by LIC last year. A spokesperson for LIC said, “There is no Sebi investigation or inquiry into the bulk and block deals done by LIC. Our investments in the stock market depend on opportunities and internal cash flows. We do bulk/block deal once in a while, when there is a special opportunity,” he said.
LIC has done a total of 26 bulk and block deals worth Rs 3,066 crore this year till November 16, according to BS Research Bureau.
“LIC has been one of the major buyers among domestic institutional investors in the last few sessions,” said another dealer. “The insurer is mostly dealing in liquid BSE 200 stocks,” he added.
Domestic institutional investors, including LIC, have been net buyers of shares worth Rs 2,869 crore in the last nine sessions in the cash market, the Bombay Stock Exchange data show.
