LIC Investment: LIC invested more money in PSU Banks and decreased stake in Private Banks

Life Insurance Corporation of India (LIC) is one of the country’s largest institutional investors with an equity portfolio of more than Rs 16 lakh crore. Recently, LIC has made significant changes to its stock holdings during the September quarter. The LIC has reduced its investments in major private sector banks – HDFC Bank, ICICI Bank, and Kotak Mahindra Bank – while sharply increasing its exposure to public sector lender State Bank of India (SBI) and to the smaller Yes Bank.

According to Prime Database, LIC purchased 6.41 crore shares of SBI in the September quarter, an investment worth around Rs 5,285 crore. In a surprising move, it also increased its stake in Yes Bank four times over, rising from less than 1% in June to 4% by September. This was in contrast to several domestic institutional investors, who reduced their positions in Yes Bank during the same period.

On the other hand, LIC sold shares worth Rs 3,203 crore in HDFC Bank, Rs 2,461 crore in ICICI Bank, and Rs 2,032 crore in Kotak Mahindra Bank. Because of this selling, the total shareholding of insurance companies in these major private lenders fell by 8–10% compared to the previous quarter. Prime Database noted that this was one of LIC’s most significant reductions in private bank holdings in recent years.

LIC’s adjustment came at a time when foreign investors were increasing their interest in private banks in 2025. Emirates NBD bought a 60% stake in RBL Bank for $3 billion, Sumitomo Mitsui increased its holding in Yes Bank to 24.2% after investing $1.6 billion, and Blackstone purchased nearly 10% of Federal Bank for Rs 6,196 crore.