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Shares of state-owned behemoth Life Insurance Corporation (<keyword id="19903588" type="General" weightage="20" keywordseo="LIC" source="keywords">LIC</keyword>) have outperformed rivals like <keyword id="20079495" type="General" weightage="20" keywordseo="HDFC-Life" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Life" meta.hostid="261" meta.entityid="HDFC Life">HDFC Life</keyword> and <keyword id="21278696" type="General" weightage="20" keywordseo="ICICI-Prudential-Life" source="keywords">ICICI Prudential Life</keyword>, as it placed bets on India's growth sectors, including infrastructure, while the private sector concentrated its bets on tech, consumer and consumer-related <keyword id="19910880" type="General" weightage="20" keywordseo="BFSI" source="keywords">BFSI</keyword> companies. LIC's stock has gained nearly 79% from Rs 620 on June 18, 2023, to Rs 1,109.15 at the closing on Tuesday, according to stock exchange data. In contrast, HDFC Life gave a negative return with Tuesday's closing price of Rs 646.55 on the BSE as compared to Rs 666.55 a year back. ICICI Prudential Life Insurance Co delivered a return of 12%, considering its stock price rise from Rs 582 on June 18, 2023, to Rs 654.10 on June 16, 2024. Over the past one year, <keyword id="19898108" type="General" weightage="20" keywordseo="SBI" source="keywords">SBI</keyword> Life Insurance shares have risen from Rs 1,314 to Rs 1,621.20, delivering a return of 23%. Capital market analysts said <keyword id="19935977" type="General" weightage="20" keywordseo="insurance-companies" source="keywords">insurance companies</keyword> make money in two ways - charging premiums for policies and then investing the premiums into assets. It is the latter that generates the bigger delta in profits, thus impacting value creation and managing risks. Global majors, including Warren Buffet-owned Berkshire Hathaway, have been successful due to their ability to make superior investments. Most Indian insurance companies are yet to capitalise on the emergence of the country's <keyword id="19997284" type="General" weightage="100" keywordseo="infrastructure-sector" source="keywords">infrastructure sector</keyword>, analysts said. Indian insurance companies have concentrated investments in the BFSI, IT, and consumer sectors - all of which have been underperformers in the recent past. Only 8-10% of their investments are in the infrastructure sector. This is far less when compared to global standards. Large global insurance companies -- such as Allianz, Nippon Life Insurance, and Metlife, and other insurers like Berkshire Hathaway -- have much larger exposure ranging from 15 to 30% to the infrastructure sector, analysts noted. Over the past few years, global insurers have been increasingly considering infrastructure investments as 'core' investments as the stable and long-term cash flows of infrastructure assets naturally align with the liabilities of insurers. Additionally, infrastructure assets have defensive characteristics of high barriers to entry, strong pricing power, structural growth, and predictive cash flows, and listed infrastructure can provide investors with inflation-protected income and solid capital growth. <h2>Infra sector outperforming all</h2>For India, a strong government focus on the sector with large spending, supporting initiatives and encouraging policies, and improving governance has helped the infrastructure industry has come of age. This has helped the infra sector to outperform all other sectors, according to analysts. They said the high focus on retail loans, and the strategic reluctance to look at infrastructure for growth opportunities is proving detrimental for the shareholders of such companies. SBI, with its higher exposure to the infrastructure sector, has seen its stock gain 48% in the year (from Rs 592 to Rs 880.95 on Tuesday), while those of its private counterparts HDFC Bank, Kotak Mahindra Bank, ICICI Bank and Axis Bank have gained only in the range of (-)3%to 24%. Kotak and HDFC Banks with negligible exposure to the infrastructure sector are the worst performing, with their shares giving a negative return, stock exchange data showed. Kotak Mahindra Bank shares were at Rs 1,895 on June 18, 2023, and closed at Rs 1,805.20 on Tuesday. HDFC Bank closed at Rs 1,619.20 on BSE on Tuesday, down from Rs 1,679 a year back.

Exposure to India's infra sector helps LIC, SBI outshine peers

Bharti Airtel, SBI, HDFC Life Insurance and other hot stocks on November 3 ahead of Diwali

State Bank of India (SBI), the country's largest lender, will divest over 2 per cent stake for at least ₹1,522.50 crore in its subsidiary <keyword id="80292" type="COMPANY" weightage="20" keywordseo="SBI-Life">SBI Life</keyword> to comply with the minimum public shareholding (MPS) norms, and will also decide on raising long-term fund up to USD 1.5 billion through bonds. The decisions were taken at the meeting of the executive committee of the central board (ECCB) of SBI on Thursday. "The executive committee of the central board of directors of State Bank of India approved the divestment of 2,10,00,000 equity shares constituting 2.1 per cent of our stake in SBI Life to adhere to minimum public shareholding of 25 per cent (remaining part of the bank's share for MPS) through offer for sale through stock exchange mechanism as per the regulatory prescription," SBI said in a regulatory filing. SBI Life, in a separate exchange filing, said the floor price for the stake sale by the promoter, SBI, has been fixed at ₹725 per share. The stake sale for non-retail investors will take place on Friday; and for retail investors and for non-retail investors who choose to carry forward their bids, on June 15, SBI Life said. During the second quarter of the previous financial year 2019-20, SBI had sold a certain portion in SBI Life Insurance Company that helped it record a historic net profit during the year. Besides, the bank's ECCB also approved to examine the status and decide on the USD 1.5 billion fundraising through bonds. "The executive committee of the central board in its meeting held today, on June 11, 2020, inter alia approved to examine the status and decide on long-term fundraising in single or multiple tranches up to USD 1.5 billion," the bank said in the regulatory filing. The public sector lender said the capital is proposed to be raised through public and/or private placement placement of senior unsecured notes in US dollar or any other convertible currency during FY 2020-21. On June 4, SBI said it was considering to raise up to USD 1.5 billion (about ₹11,422.5 crore) through a public offer and/or private placement of bonds. Earlier, in November, SBI raised ₹3,813.60 crore through perpetual bonds to fund its business growth. Shares of SBI closed 5.64 per cent down at ₹177.20 a piece on the BSE.

SBI Life shares will be on offer at ₹725 a piece on June 15

SBI Life Insurance, Videocon, Tata Power and other stocks to watch out for on June 9

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Exposure to India's infra sector helps LIC, SBI outshine peers

PTI

Bharti Airtel, SBI, HDFC Life Insurance and other hot stocks on November 3 ahead of Diwali

Rounak Jain

SBI Life shares will be on offer at ₹725 a piece on June 15

PTI

SBI Life Insurance, Videocon, Tata Power and other stocks to watch out for on June 9

Rounak Jain

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