Insurance behemoth Life Insurance Corporation of India (LIC) has offloaded over 1.92 crore shares, or nearly 2 per cent stake, of Asian Paints through open market transaction.
Following the stake sale, LIC's holding in Asian Paints declined to 3 per cent from 5 per cent earlier, as per the BSE filing by Asian Paints.
LIC sold 1,92,49,974 shares through open market, the filing said. The paint maker, however, did not disclose the sale value of the transaction.
On Monday, state-controlled LIC sold around 2 per cent stake in Axis Bank through open market transaction, bringing down its holding in the private bank to 10.2 per cent.
The stake selling in these companies indicates that the insurer wants to sit on cash rather than holding these stocks. Life Insurance Corporation (LIC) is the country's biggest institutional investor in Indian stock market and it mostly invests in blue-chip stocks.
Last week, rating agency CLSA retained its sell call on Asian Paints, India's largest paint maker, with a target price of Rs 1,285, due to weak return on equity. "The paint maker has shown strong YoY rise in FY19 free cash flow but its return on equity is weak and even its commentary is a bit cautious on FY20," CLSA said in a report.
Earlier in April this year, the rating agency had downgraded Asian Paints to 'sell' from 'outperform' and also cut target price to Rs 1,400 from Rs 1,565, citing demand concerns.
Meanwhile, Asian Paint shares closed trade at Rs 1,363.20, down 0.96 per cent, on the Bombay Stock Exchange on Tuesday. The stock opened marginally lower at Rs 1,374.90 and touched an intra-day high and low of Rs 1,374.90 and Rs 1,360.15, respectively.
(With PTI inputs)
Edited by Chitranjan Kumar