LIC Becomes Net Buyer Amid Market Downturn, Invests Over ₹21,700 Crore

The September 2025 quarter proved challenging for Indian equities, with the Sensex and Nifty indices falling by approximately 4% each. This market weakness was attributed to aggressive U.S. import tariffs and persistent outflows from foreign portfolio investors, creating global trade uncertainties and negatively impacting investor sentiment.

Despite the adverse market conditions, the Life Insurance Corporation of India (LIC), the nation's largest state-owned insurer, emerged as a net buyer in Indian equities. LIC invested over ₹21,700 crore during the quarter, a significant move contrasting with foreign institutional investors (FIIs) who withdrew nearly ₹1.3 lakh crore from the domestic cash market.

The market value of LIC’s listed equity portfolio saw a marginal sequential drop of 1.7%, decreasing from ₹16.36 lakh crore in June 2025 to ₹16.09 lakh crore as of September 2025, reflecting the overall equity market downturn. At the close of the quarter, LIC held stakes in 322 listed entities.

**Key Transactions:** LIC reinforced its confidence in State Bank of India by purchasing shares worth ₹5,999 crore. It also raised its exposure to HDFC Bank and ICICI Bank, investing ₹3,228 crore and ₹2,925 crore respectively. Other major additions included Polycab India (₹2,871 crore) and Coal India (₹2,781 crore), signaling a bullish stance on the manufacturing and energy sectors.

Conversely, LIC reduced its positions in some major financials and large-cap names. The most significant reduction was in Bajaj Finance, with shares worth ₹3,129 crore sold. This was followed by stake cuts in Bharti Airtel (₹2,195 crore) and Mahindra & Mahindra (₹1,990 crore). While LIC raised exposure in HDFC Bank and ICICI Bank, it also reduced its positions in them during the same quarter.

**Impact** This news is significant for the Indian stock market as LIC's substantial net buying activity acts as a stabilizing force during periods of foreign investor outflows and market volatility. Its investment choices provide insights into sectors and companies perceived as having strong future potential by a major domestic institutional investor, potentially influencing overall market sentiment and sector-specific performance. **Impact Rating:** 7/10

**Glossary:** * **Equities:** Ownership shares in a public company. * **Benchmark Indices (Sensex and Nifty):** Stock market indicators that track the performance of a basket of leading stocks, representing the overall market health. * **Foreign Portfolio Investors (FPIs) / Foreign Institutional Investors (FIIs):** Overseas entities investing in a country's financial assets. * **Net Buyer:** An investor who purchases more securities than they sell within a given period. * **Equity Portfolio:** A collection of stocks held by an investor. * **Sequentially:** Comparing performance from one period (e.g., quarter) to the immediately preceding period. * **Stake:** An ownership interest in a company. * **Bullish Stance:** An optimistic outlook expecting prices to rise. * **Exposure:** The amount of capital invested in a particular asset or market. * **Stake Cuts:** Reducing the number of shares held in a company.