Life Insurance Corporation of India (LIC India) doesen't seem to be bothered much as far as Infosys under performance is concerned and is playing contra by investing an additional sum of Rs 2,000 crore in the first quarter of the current fiscal.
LIC seems to be taking advantage of the blue chip stock being available at historically low valuation. At the current market price of Rs.2150 the stock is trading at a PE multiple of 12.5 times based on FY-13 expected EPS of 170 which is very cheap considering the size and the quality of the company. LIC is the largest non-promoter shareholder of the company.
LIC hiked its stake in Infosys even as a number of foreign investors pared their holding in the IT company due to growing concern over the losing market share and falling growth rate. The overall FII holding in Infosys fell from 39% to nearly 38% during the last quarter, although major investors like Aberdeen, Oppenheimer, Franklin Templeton, Vanguard and Singapore Government's investment arm raised their stake marginally in the Indian IT firm.
LIC had made its first investment in Infosys way back in 2002, when its holding was nearly two per cent. Since then, LIC's stake has been continuously rising in Infosys and had crossed 5% mark last year and then rose past 6% level during the last quarter.