In a bold strategic shift, the Life Insurance Corporation of India (LIC) has recalibrated its massive ₹17.5 lakh crore equity portfolio, making a contrarian bet on the information technology (IT) sector while reducing its exposure to banking heavyweights. As of February 18, 2026, the state-owned insurer has emerged as a major support pillar for the IT industry, plowing thousands of crores into stocks that other investors are exiting amid global AI disruption fears.
LIC’s IT sector holdings have surged from ₹1.82 lakh crore to ₹2.17 lakh crore, with the sector’s share in its total portfolio jumping to 12.43%. This aggressive buying spree comes at a time when many tech valuations have corrected by up to 30%, signaling LIC’s confidence that the current “AI anxiety” is a temporary market overreaction rather than a permanent threat to India’s outsourcing model.
The insurer has selectively picked companies with robust fundamentals and attractive valuations. The most significant additions include:
- Tata Consultancy Services (TCS): LIC invested an estimated ₹3,136 crore in the tech leader.
- HCL Technologies: A fresh infusion of ₹2,293 crore was directed here.
- Coforge: In one of its most dramatic moves, LIC increased its stake from under 1% to 4.66%, betting on a recovery in the midcap IT space.
While LIC remains the largest domestic institutional investor in financial services, it has begun thinning its holdings in top-tier lenders. Financial services’ share of the portfolio contracted to 26.52% as the insurer offloaded shares in several banking giants:
- State Bank of India (SBI): Single largest sale worth ₹3,080 crore.
- HDFC Bank: Stakes worth ₹1,528 crore were liquidated.
- Bank of Baroda: Reduced exposure by ₹1,173 crore.
Beyond banking, LIC also showed caution toward industrial and energy leaders, trimming positions in Larsen & Toubro (L&T) (₹2,442 crore) and Reliance Industries (₹2,367 crore).
This reshuffle highlights LIC’s role as a “financial shock absorber.” By buying when the market is fearful and selling into strength, the insurer manages long-term intergenerational equity for its millions of policyholders. The increase in Sun Pharma (₹2,942 crore) and NMDC further suggests a shift toward defensive health stocks and value-driven public sector undertakings.
As the government considers allowing up to 20% Foreign Direct Investment (FDI) in LIC via the automatic route through the recent Press Note 1 of 2026, the insurer’s refined portfolio positioning makes it an even more critical gauge for international investors looking at India’s long-term growth story.
Key Highlights:
- Contrarian Strategy: LIC has increased its IT sector holdings to ₹2.17 lakh crore, buying heavily into TCS and HCL Tech despite broader market fears regarding AI disruption.
- Banking Exit: The insurer offloaded over ₹3,000 crore in SBI and trimmed stakes in HDFC Bank and Bank of Baroda to rebalance its sectoral risk.
- Portfolio Growth: LIC’s total equity portfolio now stands at approximately ₹17.5 lakh crore, reflecting a diversified approach across 283 listed stocks.
- New Favorites: Midcap IT firm Coforge and healthcare giant Sun Pharma emerged as top picks, signaling a move toward value-driven and defensive investments.