FDI TO BOOST INSURANCE

Mumbai: With the hopes raised that the government will increase the cap for foreign direct investment in the insurance industry to 49 per cent from the present 26 per cent, the public sector companies could face tougher competition from the private sector.

Moody’s Icra outlook for the Indian general insurance industry observes that the capacities of the domestic partners would no longer constrain capital levels for joint ventures.

Today, despite all the constraints, the market share of the private sector is catching up and the two will likely to converge over the medium term. The market share of the public sector has come down to around 65 per cent in 2006-07 while that of the private sector has gone up to around 35 per cent in the same period from a little less than 30 per cent in the previous year.

The study says that in the past, private insurers had aggressively targeted the more profitable (and tariffed) corporate fire and engineering businesses by combining with discounted offers on de-tariffed products like personal accident and health and marine cargo and hulls.

The report said that the inherent operational flexibility of the private players, such as aggressive pricing, has allowed them to capture a greater share of large corporate accounts.

But such strong penetration of large corporate clients makes future growth in this segment more difficult. Mr Rahul Agarwal, CEO and managing director, Optima Insurance, agrees that competition for the public sector will go up if the joint venture cap is increased.

He said a lot of foreign companies will come and the Indian companies’ joint venture partners will pump in more money as they are cash starved. The JV partners feel that with just 26 per cent, they are only giving intellectual property. They would bring in more technology if the cap is raised. However, Mr Agarwal said, "market share should not be seen in isolation. Everyone grows. It happened in the case of Maruti and LIC."

The Moody’s report says further that the public entities lack the operational flexibility enjoyed by the private players. Their limited capacity to innovate has impacted their ability to tailor and aggressively price products for large corporations.

Source: Asian Age, Deccan Chronicle

‘YOU SHOULDN’T BUY A ULIP FOR INVESTMENT AND A MUTUAL FUND FOR INSURANCE’: ZANKHANA SHAH, MONEY PLANNER

Two mutual fund houses recently launched insurance features in their respective equity schemes. Rahul Jain of The Financial Express discussed the benefits and the caveats of the same with Zankhana Shah of Money Planner. Excerpts:

What could be the prime objective for adding the insurance feature in an equity mutual fund scheme, considering the current equity market situation?

There is no link between the negative sentiment in the market and providing an insurance benefit. The insurance benefit provided in an equity mutual fund scheme is a type of risk management and also gives personal cover. This feature is a very cost effective way of getting insurance with no extra cost to the investor. It is lucrative for the person who is going to take a cover for first time.

Do you think addition of the insurance component in a mutual fund scheme is actually beneficial to investors? How?

Not really because it is not substituting insurance. Insurance feature could be different in each fund house. In case of Reliance MF the insurance ceases to exist after tenure completion. Term insurance would be better for the ones who are going for a higher amount. The objective of going for investment and insurance cover is always different. You shouldn't buy a unit-linked insurance product for investment and a mutual fund product for insurance. Investors should not go for a mutual fund scheme because it has an insurance benefit.

The insurance feature in the mutual fund is limiting to switch or redeem the units because if one does so before three years, then the insurance cover expires. Your cover is related to your investment. The same is true with ULIP, where if the investment is reduced, there would be a proportionate reduction in the insurance cover.

Does this feature make the product better than ULIP and can it replace ULIP, considering the high cost structure?

Yes, it can replace/substitute a ULIP product. In ULIP there are allocation and mortality charges, which are comparatively on a higher side. If a person wants a 10-lakh cover for a tenure of 20 years, one can invest Rs 10,000 per month to get that insurance cover. However, there is a limit of Rs 15 lakh or 20 lakh insurance cover provided, unlike in ULIP where you can take Rs 50 lakh insurance as well. ULIP is being sold on the basis of insurance benefit and not investment because people go for insurance first. But if you go just for insurance, your investment needs are not fulfilled and subsequently your goals cannot be achieved. One should go for investment first and then insurance but practically it is opposite in the market.

This insurance featured product is more beneficial to the ones who are new and would like to have relatively less cover due to income limitation. Hence, one can get insurance by not paying any extra amount. This investment is less attractive for high net worth individuals (HNIs), whose insurance cover can go above 20 lakh.

Does this feature have any hidden charges other than load expenses and will that make any difference in the returns parameter?

There are no hidden charges and also it is better on the returns parameter, considering the cost involved in ULIP. A mutual fund is much more regulated and so the fund house cannot charge more than the prescribed limit unlike insurance, which comes under Irda regulation.

According to you, which one is better, if one excludes insurance benefit, mutual fund plus term insurance or ULIP? Why?

If one excludes the feature or not, mutual fund plus term insurance is much better than ULIP. The most important, as I said above, is cost effectiveness and the other is the choice of more than one fund manager. Because you can buy more than one mutual fund scheme and get the benefit of various fund managers. In ULIP if you buy more than one scheme then your total cost of insurance increases, which is nil in case of a mutual fund.

How many fund houses have introduced this feature/benefit? Do you think more will come in the near future, considering more redemption due to the downward and volatile trend?

As of date, only two fund houses have come out with the insurance feature. We could see others coming into this fray to garner more inflows. This additional feature product is also important in financial planning for any person. One more thing to note here is if all the fund houses came out with insurance, then the investor can get a higher amount of insurance with no extra cost to be borne.

Source: Financial Express

LIFE INSURERS – THE ROAD AHEAD

The insurance industry in India appears full of life. Having grown at double-digit rates in the last couple of years, it is no surprise that new players are still queuing up to enter the market.
But despite the huge untapped market potential that India has to offer, players may have to brace themselves for a slight dip in growth momentum, given the industry’s high reliance on market-linked insurance products. The unit-linked insurance policies, whose sales peaked in the last few years due to the bull run in the equity market, now make up as much as 85-90 per cent of the total insurance sales.

Slowdown – not yet
Would the recent downtrend in the equity market and the sector’s dependence on market-linked products pose challenges? The growth in premium collections during recent months provides no cause for concern. For FY08, while the industry grew by about 31 per cent, private players grew by 83 per cent; LIC registered a flat growth. However, the growth numbers for March 2008 were not as rosy. For private players, the growth in new business premium slowed down to 54 per cent in March.

The slowdown was sharper for LIC, which saw a 16 per cent decline in new business premium for the month. There, however, has been a rebound in the sector’s growth since then. Private players witnessed a 72 per cent year-on-year growth in new business sales in May 2008. This has also been on the back of a reshuffle in market shares between private players and the LIC, whose market share reduced to 38 per cent in May; it was about 48 per cent in FY08.

Players also hold the view that blips in the equity market would not materially impact collections, as ULIPs, as a product, target long-term investments. Mr Kamesh Goyal, CEO, Bajaj Allianz Life, feels, “Since the ULIP portfolio is managed with a long-term perspective, the hindrance of short-term swings in the market is countered to a great extent.” Will the growth continue if the equity markets fail to recover from their recent setbacks? The industry is not too sure of that. “The industry growth will definitely moderate. But that will be driven by both a high base effect and waning appetite for equity markets,” says Mr N.S. Kannan, Executive Director, ICICI Prudential Life Insurance Company. ” Despite that, the private sector is likely to manage a good 40 per cent growth this year”.

Most players are agreed that for long-term sustenance, there is a need for a greater understanding of equity-linked products. Any uninformed buying on the part of the policy holders or mis-selling by the insurance agents can bring the growth story to a halt in the long run. “Mis-selling will definitely impact the market badly,” says Mr Gary Bennett, Managing Director and CEO, Max New York Life. While currently there are not many genres of insurance products in India, Mr Bennett feels that India will, in a few years, see a host of new products getting introduced in the market. “ULIPs are a fantastic product, but they are not the only product. There is much more to come in India.”

Distribution holds the key
Product innovation apart, distribution looks to be a key ingredient for driving growth in the sector. “Insurance is still a push product in our country. So distribution is extremely critical,” feels Mr Kannan. “Agents need to create the need for insurance, especially in emerging markets like India, where research shows that life insurance is the last thing in the list of future purchases for the emerging middle class,” says Mr Goyal. So, while the industry’s fate may depend on the evolution of the need-based insurance products , the growth of individual companies would hinge on their distribution reach.
Mr Bennett says, “Distribution relationship is critical to the business as products can be replicated in no time.”

In a market that is quite homogenous, as far as insurance products are concerned, relationships with clients may be the only differentiating factor. Distribution capabilities and network cannot be easily replicated by competition; whereas, popular insurance products that manage to stir interest are easily imitable and can be offered by other players almost immediately.

“Production innovation can give a lead time of only six months before the product is replicated in the market. So that is the only short-term positive,” feels Mr Kannan. “For long-term growth, we need to look at continuous innovation in both products and distribution channels.”

Share of challenges
Expansion of the distribution network, however, has its share of challenges. Insurance companies with a direct distribution presence or the ones having distribution tie-ups with the promoter group’s bank (bancassurance) may have an edge over competition, given the IRDA’s regulation, which allows banks to sell policies of only one insurance company.

Insurers, who depend on other banks to cross-sell their products, may face challenges due to consolidation between banks. Higher dependence on banks that are potential acquisition targets maycall for the insurance company to periodically re-look its distribution tie-ups. The merger of Centurion Bank of Punjab and HDFC Bank is a case in point. Aviva Life, which sells its insurance products through Centurion Bank of Punjab, may have to find another bancassurance partner because after the merger, the bank may not be able to sell Aviva’s insurance policies. HDFC Bank already sells HDFC Standard Life’s insurance products.

More room for growth
, India however continues to be counted among the fastest growing insurance markets. “The Indian life insurance market has significant potential on account of low insurance penetration combined with low expenditure on life insurance,” says Mr Goyal. Even today, only about one-third of the addressable population in the country is covered under insurance. And the ones who are covered are under-covered, as over the last ten years income levels have shot up significantly. “Premium-to-GDP ratio in India is around 4.5 per cent. In UK, which is also a service economy, this ratio is 13 per cent. So, I think we are still under penetrated as far insurance is concerned,” says Mr Kannan. “Even if we consider the sum assured to GDP ratio, India is at 45 per cent, which is still below other Asian markets such as Singapore.”

It is perhaps this under-penetration that has enticed many newer players to enter our insurance market. HSBC, Fortis and Aegon are among the recent foreign players who have tied up with Indian companies to jointly float new insurance companies. The entry of new players would not only peg up the level of competition in this industry, it will also call for higher investments on distribution and infrastructure network by existing players.

Challenges galore for new players
New players, however, may find it more difficult as they will have much more to grapple with. Besides the higher capital expenditure, they can also have a tough time finding the right bancassurance partner. So, it is little wonder that some of the new insurance ventures have been floated with either domestic banks or with players who enjoy a high retail presence. For instance, IDBI Fortis Life Insurance Co Ltd, a joint venture between IDBI Bank, Federal Bank and Fortis will vend its policies through both the banks’ branches. On similar lines, HSBC’s insurance venture may ride on its branch network. “The reason for some of the private sector banks entering the life insurance sector can be to leverage on their customer base and branch network,” feels Mr Kannan.

“But new players should be willing to commit huge amount of investments for long term growth in this industry.” Among other companies that have entered the life insurance arena are Future Generali and Religare-Aegon. While they do not have any obvious bancassurance tie-ups in place, it bears attention that the Indian partners in both these ventures have a significant retail presence.

Source: Srividhya Sivakumar, (The Hindu Business Line)

ICICI LOMBARD EYES 20% SHARE

Mumbai: Largest private sector player in the motor insurance business, ICICI Lombard said it aims to increase its market share to 20% by 2010 from around 14% now. “We have around 12% market share in the country’s motor insurance business. By bringing new products, maintaining relationship with customers and offering better customer services, we hope to catch up 20% market share by 2010,” Eswaranatarajan, Head, Motor Insurance, ICICI Lombard told PTI.

New India Insurance is the largest motor insurer in the country controlling around 35% of the total market, which is pegged at 12,800 crore. The industry is growing by 20% year on year, he said.

Eswaranatarajan said that the company has opened ‘claim shops´ in various parts of the country aiming at reaching nearer to the customer and pay their claims fast. ICICI Lombard has a base of 25 lakh customers comprising 10 lakh two-wheeler owners, seven lakh car owners and eight lakh commercial vehicle owners.

“We receive around 1,75,000 fresh policies each month,” Eswaranatarajan claimed. However, he declined to share the number of products ICICI Lombard plans to come out in the near future.

The company targets new vehicles as well as renewals through dealers, garages and tie-ups with vehicle manufacturers. It has alliances with Hyundai, Ford, General Motors, Hero Honda and Eicher. ICICI Lombard had opened 120 offices last fiscal taking the tally to 340.

Source: The Hindu Business Line, PTI

RING IN NEW PENSION SCHEME

After winning the trust vote, finance minister P Chidambaram had said the government would push ahead with financial sector reforms. Presumably, this would include key economic legislation encompassing insurance and pensions. On the PFRDA Bill, the government has covered a lot of ground having incorporated some suggestions put forward by a parliamentary committee.

That should address the concerns of lawmakers. Yet, there are issues that must be addressed or at least debated before the legislation is approved. All subscribers to the New Pension Scheme, now mandatory for central government employees who joined service on or after January 1, 2004, have to reckon with a differential tax treatment. In the current tax regime, while contributions to the pensions scheme and earnings are tax exempt, the proceeds are taxed at the applicable personal income tax rate. In vogue in many other mature economies, this is also in line with the exempt exempt tax (EET) method advocated by an expert committee.
This may be a desirable approach. But it overlooks some facts. Comparable long-term social security schemes such as the Employees Provident Fund, Public Provident Fund and the General Provident Fund enjoy a beneficial tax treatment — contribution, earnings and maturity proceeds are tax exempt. It seems discriminatory as it is skewed in favour of the organised sector.

The NPS is designed to bring into its fold not just government staff but lakhs of workers including the self-employed. While providing retirement incomes to a large section of the population is the goal of the scheme, there is the promise of savings flows, which once the NPS gains traction, could fuel the capital needs of industry and infrastructure providers.

It is well known tax treatment drives the behaviour of investors and other financial product providers. In an environment where stocks held for just one year are exempt from long-term capital gains tax, it would be harsh to penalise those trying to build an egg nest. The government has two choices: ensure parity of tax treatment for all long-term social security schemes, or introduce EET across savings products.

Source: The Economic Times

EPF HAS TO EXPAND COVER FOR COUNTRY’S SOCIAL SECURITY; NO CHANGE SEEN IN INTEREST RATE

New Delhi: The employees’ provident fund, or EPF, a savings plan under which employees contribute 12% of their basic salary and the employer contributes an equal amount to a government-administered fund that is paid out either on retirement or disability of an employee, is restricted to establishments with 20 employees and more. Recently, the Union government proposed that the benefits of EPF be extended even to establishments employing 10 persons, and to all industries in the country.

According to the National Sample Survey Organisation, a government body that conducts social and economic surveys, 44.35 million enterprises employ 79.71 million workers in the so-called unorganized sector. In its existing form, as of March 2006, the EPF scheme extends to 441,000 establishments.

Mint spoke recently to A. Viswanathan, central provident fund commissioner of the Employees’ Provident Fund Organisation, or EPFO, on this and a range of issues associated with the administration of the fund. Edited excerpts:

Where does the current decision to expand EPF coverage to firms with 10 or more employees flow from?

It (the decision) is not a sudden one. It has been on the cards for a long time. The second National Commission on Labour (2004) said we have to give security to every individual. How do you do it? Instead of expanding coverage to firms with 10 or more, or five or more and so on, they asked us to extend social security to everyone. Today, luckily we are in a stage called demographic boom. But along with a boom we have a huge lurking liability. In 30-40 years all these youngsters will become old.

What is the income support they are going to have?

The family structure is not going to stay like this. Family support which has been the backbone of Indian society for so long will break up. Due to urbanization there is strain on the family structure. EPF has to expand its coverage, otherwise society will have a problem.

The recommendation (to expand coverage) was made six years ago. EPFO itself had made this recommendation in 2003. The same board had also approved this. But it came with a rider to ensure no difficulties are caused to the workers or management, because the smaller the establishment, you have to take a lot of care to reach them for the purpose of coverage, registration, enrolment and service delivery.

How do you do that?

When this recommendation was sent to the government, they decided that the time was not right. At this time, the unorganized sector workers’ Bill has come. The Bill takes care of establishments with up to nine workers.

So, establishments with 10-19 workers will be left out. So, we thought we must cover this so that the entire population comes under a certain sustainable social security model.
A number of employers were op posing this move.

Would you like to elaborate?

No one opposed it as such.
Employers’ representatives were also of the view that social security must be provided to all. Their fear is, smaller the establishment, the employer becomes the accountant, salesman, he is everything.

They were averse to adding one more administrative burden. Their concern was how to make things simpler, make it Web-enabled or something. It was more to do with processes, the process of registration, giving benefits, etc.

Will the interest rate (on EPF) be reduced to 8.25%?

The board has not taken any such decision; 8.5% can be easily sustained. Estimates are made at the start of the year based on certain assumptions. We always make a very conservative estimate on the interest rate so that we don’t make any overdraw. We would like to sustain 8.5%. In the year 2008-09, I have no means of increasing the interest rate. Maybe at the end of this year, I would be able to say.

There was a request in the CBT (central board of trustees) that the board members must meet the Prime Minister for enhancing the interest rate and to express their views on the same. You might be able to increase rates after March 2009? Even at 8.5%, you seem to have a shortfall of about Rs139 crore.

A clear picture will emerge only later. Maybe there will be no shortfall, because, interest rates have gone up now. All that has to be factored in. As per a calculation I made a couple of months ago, I might be able to maintain 8.4% without any shortfall. We might even get 1% extra. We normally fix the interest rate well before the beginning of the financial year so that any person leaving in the middle will also get a proper rate of interest. We have not been able to do it this year or the previous year also. But when we do the arithmetic later, maybe it will be possible to give a better rate. We may be able to give 8.5% without shortfall.

So 8.5% is a good rate of interest in your opinion?

(Laughs) Yes, I am giving 8.5%, which is tax-free. Secondly, in case the employer does not pay, I am underwriting the money. The big picture is pension. To get some assured money is the greatest security.

If a person is getting more by way of interest money in banks, why would they want to continue con tributing to EPF?

Two reasons. First is that contribution made to EPF is completely tax-exempt. If you put your money in a bank deposit, you are going to be taxed. Second, today the bank rate is high, but two-three years ago what was happening? People were withdrawing because bank rates were low.

In case you are making your own investments, there is an element of risk and administrative cost. EPF can spread its risks. So, there are many good reasons why EPF is good.

Are you thinking of changing the investment mix of your fund since given the current inflation trend, returns are not that great?

We are making investments as per the mandate given by the board and investment pattern approved by the government. It will not allow me to take any risk. It is their call and wisdom. The board has decided that most money will be in bonds, including those issued by the private sector. The board has refrained from investing in equity.

This is an election year, any pres sures to increase interest rate?

No, nothing of that sort.
Even if the board decides to give 15%, the government will act as a check as it is mandated to ensure that there is no overdrawal. There was a demand to set up an EPF-like fund for enabling the Un organized Sector Workers’ Social Security Bill. But the government rejected it.

Would you like to comment?

EPF was designed keeping in mind people are going to stay in one job all their life. That they were all stable persons. What you call permanent employees. But the world has changed. Labour practices have changed. We have to change along with times but we have not done it in a very efficient manner. Until we do that, keeping a track of a large number of people is creating tremendous pressure on us.

Is the pension fund slowly collapsing? What is being done about it?

Yes, pension fund is under certain strain. If the fund is closed today, then we will have to keep paying out current members until they die. So, actuaries are saying that in 60 years, if we close the fund now, we will have a shortfall of Rs22,000 crore. The crisis is not immediate. We have already initiated certain measures to reduce the strain, and we will continue to do it. Already, a panel set up by the labour ministry is reviewing this whole scheme to suggest measures to improve it.




Source: For Mint, Krishna Urthy Ramasubu

PENSION, BANKING REFORMS BILLS SOON

The Centre is contemplating to push forward the much needed reforms in the sensitive pension as well as banking sector by introducing the necessary legislations in the forthcoming Monsoon session of Parliament.

“Bills on appointing the regulatory authority to oversee management of pension funds and banking regulation like raising the voting rights of foreign banks in private sector banks are already pending in Parliament. We should be able to take them up in the forthcoming Monsoon Session,” Minister of State for Finance Pawan Kumar Bansal said here on Friday.

Further fine-tuning
The finance ministry is working on further fine-tuning of these pro-reform Bills, he indicated.

The Pension Fund Regulatory & Development Authority (PFRDA) Bill was introduced by the government in Parliament in 2005, to allow new pension fund managers - both public sector as well as private — to manage pensions contributed by the both state-owned and private enterprises. But due to persistent objections from the Left Parties the government could not push through the PFRDA Bill. Left Parties are totally opposed to private sector entry in the sensitive pension sector.The government had even promulgated an ordinance for appointing a Pension Funds Regulatory and Development Authority to oversee the pension sector. Currently the three state-owned entities—subsidiaries of SBI, LIC and UTI Asset Management Company—are managing the pension funds collected from the government employees.

Pension beneficiaries
The intended reform in pension sector seeks to allow private firms to handle this fund and invest the corpus in equity market to fetch better returns for the pension beneficiaries. As part of exercise to push through reforms in the banking sector the minister also indicated that the government would introduce the Banking Regulation (Amendment) Bill in the coming Monsoon session.The Bill proposes to allow foreign investors to have voting rights in banks in proportion with their equity holding, rather than being capped at 10 percent now. Though the Bill was vetted by the Parliamentary Standing Committee of Finance the government could not push through the Bill in the last Budget session in the face of strong opposition from the Left Parties.

Source: The Economic Times, Deccan Chronicle

LIC WALKS OUT OF CREDIT CARD VENTURE WITH GE

Mumbai: Life Insurance Corporation (LIC) will not partner with GE Money for its proposed foray into credit card business following huge loss reported by SBI Cards & Payment Services Private Ltd, in which the Indian arm of the US conglomerate has a 40 per cent stake, an LIC official said.

For the first time in its decade-long existence, SBI Cards has reported a net loss of Rs 150 crore for 2007-08 (April-March). “The experience of SBI Cards with GE Money was not encouraging. We also had experienced problems in the past with foreign players. We may go alone for the credit card venture,” the official said.

Though LIC may take some time to decide whether to go solo, a clutch of institutions are already queuing up to partner the insurance behemoth. “There are already four to five institutions that have shown interest in partnering us,” the official said without divulging further details.

In the proposed card venture, GE Money was to have 30 per cent stake and LIC 40 per cent. Corporation Bank, LIC Housing Finance and LIC Mutual Fund were supposed to have 5 per cent each and the remaining 15 per cent was scheduled for a private equity player.

If LIC goes solo, then the insurance firm will have to take the proposed stake of GE Money, thereby pushing up its holding in the venture to 70 per cent, the official said.
LIC’s decision to partner GE Money in the plastic money business had irked State Bank of India (SBI), industry officials said. SBI was not comfortable with the idea of GE Money partnering with LIC as it feared a conflict of interest.

LIC, on the other hand, went on record saying it does not have any problem with GE Money partnering it as well as SBI for the credit cards business. “We do not have a problem with GE Money’s presence,” Hemant Bhargava, chief executive officer-designate of the LIC’s card venture had told on April 10. However, after SBI announced an increase in bad assets from its credit card business in May, LIC started to rethink the deal, banking industry officials said.

As per earlier plans, LIC’s card venture was expected to start operations by the end of the current year, which now seems somewhat uncertain. SBI recently appointed Diwakar Gupta, who was the chief general manager of State Bank of Patiala, as the chief executive officer of SBI Cards. Earlier, a GE Money official held the post.

Source: Newswire18, Business Standard

LIC ACCUMULATES STAKE IN 22 SENSEX COS

Mumbai: Life Insurance Corporation of India (LIC) appears to have made some value buying in the last quarter, when many blue chips lost heavily from bear hammering.
The Government-owned insurance company, which is a major player in the equity market, increased its stake in the Sensex stocks during April-June quarter

LIC raised its stake in 22 Sensex companies, during the June quarter, according to a study on the Sensex companies’ public shareholding of more than 1 per cent.

Prunes stake
However, it pruned or maintained its stake in the IT software majors during the same period; software companies’ share prices outperformed the Sensex during the last quarter. On a quarter-to-quarter basis, during the same period, the Sensex fell 14 per cent, to 13,461 on June 30 from 15,644 at March end.

It reduced its stake in Infosys from 3.72 per cent to 3.62 per cent and in Satyam Computer it brought down its stake from 2.71 per cent to 2.51 per cent. In TCS, while the LIC stake remains unchanged at 2.21 per cent, Wipro’s shareholding pattern for June quarter has not been updated.

Its stake in Housing Development and Finance Company also remains unchanged at 1.43 per cent. In Ranbaxy Laboratories, LIC reduced its stake from 15.84 per cent to 15.01 per cent.

ICICI Pru too hikes
The private sector ICICI Prudential Life Insurance has also been strengthening its stake in the Sensex companies. In the June quarter, ICICI Prudential raised its stake in Infosys to more than 1 per cent during the quarter, whereas in the previous quarter, it did not figure in the one per cent plus shareholder list.

Among other companies in which ICICI Prudential Life Insurance has raised stake in the June quarter are ACC (from 1.10 per cent to 1.13 per cent), HDFC Bank (more than 1 per cent to 2.65 per cent), Satyam Computer (from 2.83 per cent to 3.28 per cent), Mahindra & Mahindra (from 3.18 per cent to 3.42 per cent). Meanwhile, in same quarter, ICICI Prudential reduced its stake in capital goods major Larsen & Toubro (from 1.38 per cent to 1.33 per cent) and in BHEL it reduced (from 1.45 per cent to 1.17 per cent).

Barring UTI, most of the domestic mutual funds don’t figure among the public shareholders having more than one per cent stake in the Sensex companies. The FIIs during the same period showed mixed behaviour. Many FIIs raised their stake in Sensex companies, but those who have reduced their stake or made a complete exit outnumber the former.

In DLF and NTPC neither LIC nor any other public shareholder had 1 per cent or more stake as at the end of the last quarter.

Source: The Hindu Business Line