LIC has been an big investor in many companies which are in the list of applications admitted by National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC). The list includes Alok Industries, ABG Shipyard, Amtek Auto, Mandhana Industries, Jaypee Infratech, Jyoti Structures, Rainbow Papers and Orchid Pharma. Stocks of most of these companies have seen more than 95% value erosions from their peaks thereby denting the overall performance of the insurance provider.
Commenting on the company’s investments, Hemant Bhargava, managing director, LIC of India, said: “In the last three years, we have taken a conscious decision of investing only in the BSE200 companies. But you should know that LIC is an old institution and there are legacy investments about which there is nothing much we can do.”
LIC has also been the largest shareholder and probably the only institutional shareholder in companies such as Gitanjali Gems, Vakrangee and Videocon Industries, which have been in the news for the wrong reasons and alleged for poor governance and lack of transparency.
Other well-known names which have been great value destroyers but can be found in LIC’s portfolio include Reliance Communications, GTL Infra, Electrosteel Castings, Opto Circuits (India), Zylog Systems, Rolta India, Aban Offshore, Shree Renuka Sugars and Monnet Industries.