LIC hikes stake in Hindalco to 9 pc

MUMBAI: Cashing in on the opportunity to consolidate its stake in Hindalco, state-run Life Insurance Corp (LIC) has hiked its stake in the Aditya Birla flagship to over 9 per cent through open market transactions after its share price plunged on Novelis buyout.

Hindalco, which announced its $6 billion Novelis acquisition on February 11, saw its share price plunging 14 per cent to Rs 149.45 a day later and has since remained closer to this price.

This lured the country's top insurer, which bought more than two crore shares in the company between March 31 and April 28 this year, according to data available with BSE.

Between January 5, 2006 and April 28, 2007, LIC purchased 2.05 per cent or 4.01 crore shares in Hindalco, the company said in a regulatory filing.

However, a closer analysis of the shareholding pattern reveals out of this 4.01 crore shares, LIC acquired 2.13 crore shares for up to Rs 324 crore in just 20 days after March 31.

In comparison, it took LIC 15 months to increase its holding to 8.6 crore shares till March 31, from 6.48 crore shares, or 7.01 per cent stake, as on January 5, 2006.

Investors may have dumped the Hindalco stock citing short-term concerns like Tata Steel after acquiring Corus, but LIC took the oppurtunity to grab position in a company which is slated to be the world's largest aluminim rolling company after the Novelis buy-out.