LIC Dumps Tech Stocks! ₹1.45 Lakh Crore Wiped Out – What’s Next?

India’s largest institutional investor, Life Insurance Corporation of India (LIC), has significantly reduced its equity exposure over recent quarters. As of Q3 FY25 (ended December 2024), LIC’s aggregate equity holding in NSE-listed companies dropped to a record low of 3.51%, according to regulatory filings.

This move is part of LIC’s broader profit-booking and risk management strategy. The insurer cut its stake in 98 companies, while increasing it in only 71 companies, indicating a defensive shift amid heightened market uncertainty.

By early 2025, the insurer’s mark-to-market equity portfolio value fell sharply—from ₹14.9 lakh crore in December 2024 to around ₹13.4 lakh crore in February 2025. That’s a massive ₹1.45 lakh crore erosion (approximately 5.7%) in just two months, largely driven by a broader market correction.

Sharp decline in major holdings of LIC

The value decline was led by sharp price drops in LIC’s major holdings, especially in blue-chip names. Key contributors to the fall include:

• ITC: Loss of ₹17,000 crore
• TCS and Infosys: Combined loss of ₹10,500 crore
• SBI: Loss of ₹8,500 crore

Other major laggards included Jio Financial Services, HCL Technologies, L&T, Adani Ports, and JSW Energy, each contributing significantly to the drop in overall valuations.

These declines affected not just LIC’s books but also investor confidence in large-cap stocks, many of which are widely held in mutual funds and retirement portfolios.

Strategic Portfolio Shift in Q4 FY25

In response, LIC launched a major portfolio reshuffle during Q4 FY25 (ending June 2025). The insurer reduced stakes in 81 companies, while increasing exposure to PSU defence firms—marking a strategic shift toward government-backed, stable sectors.

Notably, LIC participated in a major Qualified Institutional Placement (QIP) for State Bank of India, investing ₹5,000 crore to increase its stake from 9.21% to 9.49%.

It also raised its holdings in:

• Reliance Industries
• Tata Motors
• Patanjali Foods

Meanwhile, it trimmed positions in high-volatility names like:

• ICICI Bank
• Infosys
• TCS
• Bajaj group companies

This suggests a clear pivot away from cyclical and tech-heavy sectors and a renewed focus on more predictable and government-aligned sectors like defence, energy, and public sector banks.

Outlook: Rebalancing for Stability and Long-Term Growth

Despite the recent volatility, LIC shares are still trading slightly above their 52-week lows. Analysts are forecasting a potential 20–25% upside over the next 12 months, with price targets ranging between ₹825 and ₹1,320, assuming the market stabilizes.

This deliberate reduction in equity exposure and repositioning toward safer assets appears to be part of a calculated risk-management approach.

By minimizing holdings in tech and finance—which are more sensitive to global economic swings—and leaning into PSU sectors, LIC is likely trying to safeguard policyholder funds and reduce short-term volatility in its balance sheet.

Analyst Viewpoint:

While this portfolio rotation may provide protection in the near term, future performance will depend heavily on timing, sectoral picks, and broader macroeconomic recovery. Volatility may persist, but LIC’s rebalancing could position it well for long-term growth once earnings across sectors begin to stabilize.

F.A.Q.

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