LIC raises stake in this bluechip IT stock to 8.88 percent; Are you holding it?

The Life Insurance Corporation of India (LIC) has increased its equity shareholding in Tech Mahindra via open market transactions in the past six months. 

The insurance behemoth mentioned in an exchange filing that its shareholding has increased from m 6,69,25,392 to 8,65,58,538 equity shares. In other words, it increased its stake by 2.01 per cent from 6.869 percent to 8.884 percent of the paid-up share capital of Tech Mahindra from November 21, 2022, to June 06, 2022. The transaction happened at an average cost of ₹ 1050.77 per share. 

By the end of the January to March quarter, LIC held an 8.07 per cent stake or 7.86 crore equity shares in Tech Mahindra. 

Tech Mahindra is a blue-chip company that provides a comprehensive range of IT services, including IT-enabled services, application development and maintenance, consulting and enterprise business solutions and so on to a diversified base of corporate customers in a wide range of countries. 

With a market capitalization of ₹ 1,06,760 crores Tech Mahindra is a large-cap stock. It has an ideal return on equity of 17.63 percent and an ideal debt-to-equity ratio of 0.10. Its shares were trading at a price-to-earnings ratio (P/E) of 28.80 which is lower than the industry P/E of 29.19 indicating that it might be undervalued as compared to its peers. 

The company’s promoters hold a 35.18/ percent stake in it, followed by foreign institutions with 26.87 percent, retail investors with 13.48 percent, mutual funds with 12.93 percent and other domestic institutions investors with a 2.24 percent stake. 

Written by Simran Bafna 

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