Life Insurance Corporation of India, the country's largest domestic institutional investor, has experienced significant portfolio erosion amid the July 2025 market decline. The insurer's equity holdings faced substantial mark-to-market losses as benchmark indices retreated from their recent highs.
Life Insurance Corporation of India witnessed a ₹46,000 crore erosion in its equity holdings value during July 2025, as market turbulence affected the insurance giant's massive investment portfolio. The portfolio value declined from ₹16.10 trillion on June 30, 2025, to ₹15.64 trillion by July 25, 2025, representing a substantial mark-to-market loss across its 322 stock holdings. This decline coincided with benchmark indices Nifty 50 and BSE Sensex slipping 2.6% from their June 2025 end levels to 24,837 and 81,463.09, respectively.
Despite this significant monthly decline, LIC's portfolio value remains higher by ₹1.94 trillion compared to April 7, 2025, indicating the substantial gains accumulated earlier in the year.
Reliance Industries Limited appears to have contributed significantly to LIC's portfolio decline in July 2025, earning the designation as the biggest value drag during this period. As LIC's largest holding worth ₹1.3 lakh crore, representing a 6.93% stake, any decline in RIL shares would have a substantial impact on the overall portfolio performance. The company's position as India's largest conglomerate makes it a critical component of LIC's investment strategy.
LIC maintains investments across 322 stocks, demonstrating broad market exposure that provides both opportunities and risks during market volatility. The insurance giant's portfolio spans multiple sectors, with top holdings including ITC as the second largest position at ₹82,200 crore (15.8% stake), followed by HDFC Bank at ₹68,600 crore, State Bank of India at ₹66,300 crore, and Larsen & Toubro at ₹64,100 crore. The top 10 holdings account for over ₹6 lakh crore of LIC's total equity portfolio.
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Prior to the July decline, LIC had been actively reshuffling its portfolio during the June 2025 quarter, reducing stakes in 81 companies while strategically adding 4 PSU defence stocks. The insurer reduced positions in popular retail favourites, including Suzlon Energy, Reliance Power, and Vedanta, while increasing exposure to defence sector stocks like Mazagon Dock Shipbuilders with a fresh 3.27% holding worth ₹3,857 crore. This rebalancing reflected LIC's focus on strategic sectors amid changing market dynamics.
The ₹46,000 crore decline highlights the significant impact market movements have on large institutional investors like LIC. As India's largest domestic institutional investor, controlling equity holdings worth approximately ₹15.5 lakh crore, LIC's portfolio performance closely mirrors broader market trends. The July decline occurred despite the insurer's diversified approach across 277 listed equities and strategic sector allocations.
On July 28, 2025, LIC share price opened at ₹881.10 on NSE, below the previous close of ₹886.85. During the day, it surged to ₹898.90 and dipped to ₹880.05. The stock is trading at ₹897.80 as of 12:32 PM. The stock registered a gain of 1.23%.
Over the past week, it has declined by 1.02%, over the past month, it has declined by 6.49%, and over the past 3 months, it has moved up by 13.19%.
LIC's ₹46,000 crore portfolio decline in July 2025 reflects the broader market correction that reduced benchmark indices by 2.6%. While this represents a significant monthly loss for India's largest institutional investor, the portfolio value remains substantially higher than April 2025 levels, demonstrating the resilience of long-term investment strategies despite short-term market volatility.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in securities are subject to market risks. Read all related documents carefully before investing.
Published on: Jul 28, 2025, 2:26 PM IST
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