List of Top 30 Stocks where LIC made a profit of 10,000 Crores from Equity Portfolio
Investors would always struggle to make money from stock market. Investing in right stock is always a challenge. LIC has announced that it made Rs 10,000 Crores profit from the stock market in the last 4.5 months from equity portfolio. While the investment also could be high, many of us including me are curious to know which stocks did LIC invest which has given such superior profits in last 4.5 months. In this article we would provide the list of top stocks where LIC has invested and where it made Rs 10,000 Crores profits from 1-Apr-2020 to till date. We would also views what lessons we can learn from such an investment strategy.
LIC statement about Rs 10,000 Crores profits from equity stock market
Few days back, LIC Chairman Mr.M R Kumar informed that LIC has made Rs 10,000 Crores profits from 1-Apr-20 to till date in equity portfolio. Mr. Kumar said “I cannot give the figures and we were only buying during lockdown. We hardly offloaded stocks”. Many of us might be curious to know where exactly LIC would have invested that it got such huge profits.
List of 30 Stocks where LIC invested and made a profit of 10,000 Crores from Equity Portfolio
Here is the list of stocks LIC were investing as on 1-Apr-2020 and their current market prices and profits thereof. Let us see some highlights.
1) There were three stocks where it made profits between 300% to 773%. Alok industries (773%), Ballarpur Industries (414%) and GTL Infra (300%).
2) Out of these 30 stocks, only one stock is where the returns are 87%, but all other stocks gave above 100% returns in the last 4.5 months.
3) Surprisingly, there are several penny stocks also that LIC has invested. Either it could be that they invested earlier and they became penny stocks or either it could have intentionally invested in penny stocks. Out of 30 stocks listed here, 13 stocks are penny stocks (< Rs 10 as on 1-Apr-20).
4) It invested in low value stocks like Reliance ADAG (Reliance Infra, Reliance Comm, Reliance Power, Reliance Capital etc.). Hower, such low value stocks gave returns between 127% to 292% in the last 4.5 months.
5) Another surprising thing it it did not have NIFTY 50 stocks in its top 30 stocks (may be these are over and above top 30) portfolio where it earned high profits.
Also read: Best Pharma Mutual Funds to invest in 2020
Here are the stock prices as on April 1, 2020 and as of now
|Reliance Home finance||0.8||2.2||187%|
|Dalmia Bharat Sugar||50.7||145.0||186%|
|Orissa Mineral Development corp||983.0||2,649.0||169%|
|Cox and Kings||0.6||1.5||150%|
|Binny mills ltd||41.0||87.0||112%|
What lessons we can learn from LIC making such nice profits?
Here are some of the lessons:
1) LIC chairman, said it has continued to invest during the lockdown period. During that period, the stock market has crashed and many stocks were available at cheap valuations. One should always encash such opportunities when such huge stock market corrections are happening.
2) LIC also indicated that they hardly offloaded stocks. Investors general tendency is to sell stocks when stock markets are taking huge beating and buy when stock markets are rising. What LIC did is the exact strategy that an ideal investor is supposed to do.
3) Its top 30 stocks where it made high profits at the stock level (irrespective of quantum of profit) have non NIFTY50 stocks. While NIFTY50 stocks make profits, in recovery phase, midcap stocks and small cap stocks tend to move faster than large cap stocks. Some experts argue that investing in midcap and smallcap stocks is a high risk, hence we should stay away when stock markets are falling or in the recovery stage (where we can’t predict whether it can fall further or recover). It invested in penny stocks too. While my view is not to suggest to invest in penny stocks, one can always look at midcap or small cap stocks which could be multibaggers in medium to long run.
This article is not a recommendation to buy any of the above stocks. It is only an analysis as to how LIC made such huge profits and what lessons one can learn from their strategies. The data might not be 100% complete as we considered only top 30 stocks based on increase in stock prices and not based on profit volume.
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