LIC has lost its throne to SIPs. It’s still the smartest investor in the room

**Snigdha Sharma** (0:01)
In the first three months of this year, foreign investors pulled out over 2 lakh crore rupees out of Indian stocks. Quite the staggering exit. And in the middle of this, one institution was quietly doing the opposite. LIC or the Life Insurance Corporation deployed nearly $2 billion into Indian equities in that same period. It bought Infosys, TCS, Bharti Airtel, Hyundai and Maruti. All of them had fallen sharply, but LIC bought them anyway. If you are one of LIC's over 260 million policy holders, you probably did not notice this. You just paid your premium this month the way that you always do, just waiting for a policy that matures years from now. It could be around a retirement, a wedding or an education.
Basically, your money is not sitting idle with LIC. It puts it to work in the stock market on your behalf at a scale that most people do not fully comprehend. For example, the value of LIC's equity holdings has grown over 250% in six years to 15 lakh crore rupees. For decades, LIC has been the institution that stepped up when Indian markets wobbled, whether it was buying when foreign money was leaving the country or holding out through downturns. Fund managers have repeatedly described its style as that of a contrarian investor who buys when others are selling or vice versa.
But something has been changing lately. Mutual funds fed by millions of retail investors putting money in every month through SIPs. And SIPs have grown into a sort of a second pillar of domestic market support. And LIC, which once carried in markets largely alone, now shares this role. Now, the shift is important because it changes what LIC is, what it's for and who it ultimately answers to.
Is it a disciplined long term investor acting in your interest as a policy holder? Or is it the government's instrument of last resort, buying what the market will not, whether it is a public sector bank that needs capital or a politically connected conglomerate under pressure? The answer, it turns out, is both. And that is exactly the problem.
Welcome to Daybreak, a business podcast from The Ken. I'm your host Snigdha Sharma and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Tuesday, the 9th of June.
So, let us start with the investor, because to understand the tension in the story, you first have to see just how good LIC has been at this. The Nifty IT index, for example, is down over 27% this year. Concerns about whether India's technology companies can keep up with the AI race have hammered valuations across the board. Most investors have been cautious. But with LIC, it is a different story. During the March quarter, LIC increased its stakes in four of the six largest IT stocks in its portfolio. TCS, Infosys, LTI Mindtree and HCL Tech. This is typical LICUC. The pattern across the sectors is consistent. Buy on dips, stay patient through the cycles, and exit before a peak. JSW Energy is also a good example of this. In March 2020, LIC held a 5% stake in the Sajjan Jindal led renewable energy company worth roughly 500 crore rupees. During COVID, when the power sector had a low capacity and limited investor interest, LIC kept building its position. Then, as the renewable energy team picked up between 2023 and 2025, it started trimming. And then, when the sector corrected last year, it started buying again. The value of that holding since has risen about 13 times over the years to nearly 6,000 crore rupees.
What allows LIC to invest in this way is time. Mutual fund investors tend to redeem or pause their SIPs within relatively shorter horizons. An LIC policy holder, on the other hand, typically waits 10 to 40 years for their policy to mature. That means that the company keeps collecting premiums steadily throughout market downturns and can keep deploying capital when others are pulling back. That patience also gives LIC room to shuffle within sectors. In financial services, for instance, it has held around 10% in NSC for years. Late last year, it also started buying shares in BSE, NSC's rival exchange, and now it holds close to 5.5%.
Bhavin Pandey, a fund manager at MK, described LIC's position to my colleague, The Ken reporter Akriti Bhalla, in both exchanges as a bet that both players may benefit over the long term, even as they compete for the market share. Even in consumer goods, the logic holds. LIC has steadily raised its stake in Dabur, which is a stock that has been down slightly over the last six years, while pairing exposures to more expensive names like HUL. The bet is on value and time but not momentum. And here is where things get a little complicated. Stay tuned to find out.