amie Modak & M Saraswathy | Mumbai July 26, 2013 Last Updated at 22:38 IST

Fifth of HUL open offer shares tendered by LIC

The insurer by tendering its shares in open offer has missed potential gains of nearly Rs 500 crore
A fifth of the voluntary open offer in Hindustan Unilever Ltd (HUL) was tendered by state-owned insurer Life Insurance Corp of India (LIC). According to a stock exchange filing, the insurer has sold about 67.32 million (3.11 per cent) shares of HUL at Rs 600 per share, cashing out over Rs 4,000 crore. Unilever's Rs 29,200-crore voluntary open offer, India's largest ever, saw 320 million shares being tendered by investors against the offer size of 487 million. ALSO READ: Lower volume, price mix pull down HUL sales in June quarter Shares of HUL on Friday ended at Rs 663.30, down 3.4 per cent, but up over 10 per cent from its open offer price of Rs 600 per share. HUL shares had touched an record high of Rs 725 earlier this week. The insurer by tendering its shares in the open offer has missed potential gains of nearly Rs 500 crore. A senior LIC official said the life insurance company took investment decision with a long-term view. At that juncture, we felt that the decision that we took with respect to the open offer in that company was a good investment decision, the official said. Interestingly, before HUL's offer commenced, LIC officials had maintained that they might not offer their holding in the company. During the open offer, the market was abuzz with speculation that LIC, along with other state-owned shareholders, were 'nudged' to part with their shares to stem the fall in the rupee. ALSO READ: Record HUL bearish bets signal stock drop LIC, which held 69 million shares (3.22 per cent) in HUL at the end of the March quarter, would now be left with only a minuscule holding, which is has substantial weightage in benchmark indices Sensex and Nifty. Market experts said LIC might have taken the decision to sell shares in HUL as the stock was trading at nearly 38 times its estimated 2013-14 earnings. Most fastmoving consumer goods stocks trade at valuations of less than 30 times. Also, the insurer would have been able to sell such a large chunk of shareholding only through an open offer and the stock price would have crashed had it decided to sell it in the secondary market, experts pointed out. The huge gains made by LIC by selling shares in HUL would come in handy for the insurer.

This year, LIC is planning to ramp up its efforts and invest more in agent training and marketing of new products under new product guidelines, apart from opening up offices in all Tier IV towns. LIC said it would open 1,700 offices by December. Thomas Mathew, the former in-charge chairman of LIC, had told Business Standard recently in FY13, it made a 33 per cent growth in profit booking and booked Rs 21,000 crore profit from sale of equities and churning of the portfolio. This year, LIC is looking to book Rs 25,000 crore as profit from churning of equity portfolio.

SI Reporter | Mumbai July 26, 2013 Last Updated at 09:21 IST

DLF gains on stake sale in insurance JV

The transaction is in line with the DLF's ongoing strategy to divest non-core assets, DLF said in a statement.

DLF is trading higher by 2% at Rs 179 in early morning deals on BSE after the real estate major said it has signed a definitive agreement to sell its 74% equity stake in its the Life Insurance Joint Venture -DLF Pramerica Life Insurance Company to Dewan Housing FinanceCorporation and its group entities. The transaction is in line with the DLF's ongoing strategy to divest non-core assets, the company said in a statement. As per the company, the transaction of the sale value would be disclosed post receipt of all approvals. DLF Pramerica Life Insurance Company Ltd is a joint venture between DLF and Prudential International Insurance Holdings Ltd, a subsidiary of Prudential Financial, Inc USA. DLF stock opened at Rs 177 and hit a high of Rs 180 so far on BSE. Dewan Housing Finance was also trading higher by 3% at Rs 158