Rich pickings

Mumbai, Nov. 2: The Life Insurance Corporation of India has raised its stake in Tata Tea to 16.03 per cent after buying shares worth Rs 113.10 crore through open market transactions.

The LIC has bought 12,95,212 shares, representing a 2.09 per cent stake in Tata Tea.

Prior to the purchase, the LIC held 13.93 per cent in the Tata firm.

The state-run insurer has pumped around Rs 90,000 crore into the markets, of which Rs 16,000 crore was into equities during the first half of this fiscal, a top company official said last month.

“We have made a total investment of over Rs 90,000 crore in various instruments of the market till September-end,” LIC executive director (investment operations) N. Mohan Raj said.

The LIC invests around 8-9 per cent of the total premium collected in the stock market every year.

The life insurer was bullish on the banking and pharma sectors.

The insurance major could exceed its investment target of Rs 1.75 lakh crore in 2009-10, the official said.

LIC garnered a premium of Rs 6,544.99 crore in August this year against Rs 3,562.93 crore in the corresponding period of the previous year, according to data of the Insurance Regulatory and Development Authority. The premium collection of the life insurance industry grew 44 per cent to Rs 9,044.18 crore in August this year against Rs 6,273.57 crore in the same period last year.

Meanwhile, Tata Tea has reported a net profit of Rs 258.04 crore for the July-September quarter on a standalone basis against Rs 43.79 crore in the corresponding year-ago period.

Consolidated net profit rose to Rs 287.44 crore from Rs 217.76 crore a year ago.

“During the quarter, consequent to a favourable exchange rate movement, there is a notional unrealised gain on translation of short-term foreign currency financial assets held by an overseas subsidiary, reversing the trend of unfavourable exchange rate movements experienced during the first quarter of this year,” a company statement said.

Tata Tea’s wholly owned subsidiary, Tetley of Britain, has acquired a controlling 51 per cent stake in a Russian beverage firm with effect from September 1.