Stock Market Crash Impacts LIC's Investments

In a significant financial downturn, Life Insurance Corporation of India (LIC), the nation's largest domestic institutional investor, has seen a drastic reduction in its equity portfolio value by Rs 1.45 lakh crore within just two months of 2025. This marks one of the most substantial mark-to-market losses in its recent history for its extensive 310-stock portfolio.

The severe decline in LIC's investments directly correlates with the overall market crash, particularly affecting small and mid-cap shares, which have experienced their most significant decline since the COVID-19 crisis. Large-cap shares, where LIC maintains considerable investments, have also experienced substantial losses.

Key Investments Suffer Major Losses

ITC, LIC's second-largest equity investment, has contributed significantly to the portfolio's decline, with an 18% decrease resulting in approximately Rs 17,000 crore value reduction. Technology companies TCS and Infosys, where LIC maintains 4.75% and 10.58% ownership respectively, have declined, reducing the portfolio value by Rs 10,509 crore and Rs 7,640 crore, according to ACE Equity data.

Banking Sector Not Spared

In the banking sector, LIC's substantial investments in SBI (9.13% stake) and ICICI Bank (7.14% stake) decreased by Rs 8,568 crore and Rs 3,179 crore respectively. Jio Financial Services recorded a 30.5% decline, reducing LIC's investment value by Rs 3,546 crore. Additional significant decreases were observed in L&T, HCL Tech, M&M, Jio Financial, ICICI Bank, Adani Ports and JSW Energy, with most experiencing double-digit percentage losses this year.

Market Outlook and Recovery

The ongoing market instability and persistent selling pressure raise questions about potential further losses in LIC's investments. Despite the insurer's historical resilience to market fluctuations, continued FII selling and weakness in small and mid-cap sectors suggest sustained challenges ahead.