LIC Buys Tech Mahindra Stake
By Arnab Ghosh, Gaea News NetworkWednesday, May 5, 2010
MUMBAI, INDIA (GaeaTimes.com)- It seems that LIC of India is eyeing an expansion overdrive in various segments. It recently bought 7% stake in Tech Mahindra from the USA’s leading telecom services provider AT&T at a cost of estimated INR 560 crore. The buying was done through a block deal. It reduced AT&T’s holdings in Tech Mahindra to just 1 percent. It is quite unexpected considering the fact that AT&T had bought this stake hardly a month back. However, Tech Mahindra is happy with this purchase. With this, LIC’s stake in the technology major has gone up to 14 percent. If this is combined with LIC’s stake in Mahindra Satyam, it could suggest LIC emerging as a strategic partner for Tech Mahindra. Reportedly, LIC is also in talks about a major outsourcing deal with the tech company.
Apart from increasing its stake in Tech Mahindra, LIC is also eyeing other segments that it has not tapped into yet. It has also been reported that the housing finance section of LIC, LIC Housing Finance, is eyeing an entry into mainstream banking this year. It is waiting for a RBI guideline that will come out in two months defining the eligibility for the same. If the permission is obtained, the home loan segment will enter banking even if the parent company is not able to do so.
Since LIC is still a public sector organization it may not enter banking. However, LIC Housing Finance has not yet approached RBI. The RBI guideline will make it clear which financial institutions are qualified to enter banking sector.
