The ONGC stock was the top gainer on the Nifty and the Sensex on Thursday. That helped LIC’s investment last year in ONGC turn positive.
India’s largest life insurer, LIC, had increased its stake in ONGC to 9.475 per cent (81.06 crore shares) when the offer-for –sale was done in March 2012. LIC had then picked up 37.71 crore shares at Rs 293.54 a share.
The ONGC stock on Thursday closed at Rs 303 a share on the NSE, up 3.7 per cent, and Rs 301.9 a share on the BSE, up 3.41 per cent. Total traded quantity on the NSE was 98.09 lakh shares with a deliverable quantity of 53.78 lakh shares.
On the BSE, total traded quantity was 9.05 lakh shares with a total deliverable quantity of 2.79 lakh shares.
MARKET LEADERS
Recently, responding to mark-to-market losses booked on PSU stocks by LIC, its chairman, D.K. Mehrotra, said, “Nowhere have we suffered any losses. These stocks have shown appreciation cumulatively also.
Our average acquisition price for PSU stocks are very low compared to current market prices. Even if I were to exit these scrips today, I would book huge profits.”
“I do not disclose my book values to anybody because the market will get affected if this information goes out,” he said.
On LIC buying PSU stocks, he questioned whether anybody in the country can construct an equity portfolio without these scrips. PSUs are market leaders in their respective businesses, he pointed out.
Further, the average duration of LIC’s policies is 15 years and we look to 15-20 years investment horizon, he said.
Sector looking buoyant
Marketmen said the oil and gas sector stocks were looking buoyant given the policy pronouncements on fuel price hikes.
“Fundamentally, ONGC is a very good stock to have in one’s portfolio. Until last week, it was trading at a price to earnings ratio of 10 and at this valuation it is a steal. Its assets and management quality are excellent,” said Rajesh Agarwal, Head — Research Eastern Financiers.