LIC quietly added 3 new stocks — what does it know that we don’t?

By Admin

29 May, 2025

India’s largest and most conservative institutional investor, Life Insurance Corporation of India (LIC), is rarely known for making surprise moves in the equity markets. Its investing style leans toward tried-and-tested, mature businesses that offer predictable returns and financial stability. So, when LIC added three new names to its portfolio in the March 2025 quarter, it sparked quiet curiosity across market watchers and analysts.

These new additions—IRFC, Jindal Stainless, and KPIT Technologies—aren’t trendy or speculative picks. They’re solid, steady companies operating in niche sectors with potential for long-term, stable growth. Let’s break down what LIC might be seeing in these stocks.

1. IRFC: A Slow but Steady Engine of Railways

The Indian Railway Finance Corporation (IRFC) may not make headlines often, but its role in the infrastructure backbone of India is undeniable. As the financing arm of Indian Railways, IRFC raises funds to support engine purchases, railway coaches, and infrastructure projects. With a massive AUM of ₹4.6 trillion (as of March 2025), IRFC’s book is almost entirely backed by the Ministry of Railways.

While this high concentration ensures stability—no NPAs, negligible credit costs—it also poses a growth challenge. IRFC’s AUM has remained flat for two years, and disbursements in FY25 were modest. However, the company is working on diversifying into areas linked to Indian Railways, which could open new avenues.

Despite slow growth, IRFC's dependable cost-plus model ensures consistent returns. In FY25, net interest income grew 2% and net profit rose 1.4% to ₹65 billion. The stock now trades at a price-to-book value of 3.5x, higher than its long-term average, suggesting investor confidence.

LIC’s Takeaway: Predictable earnings, government backing, and low risk—IRFC is a safe addition that fits LIC’s profile perfectly.

2. Jindal Stainless: Riding the Steel Supercycle

Jindal Stainless, the largest stainless steel manufacturer in India, may not have captured LIC’s attention earlier, but its robust fundamentals are now hard to ignore. From manufacturing facilities across India, Spain, and Indonesia, to a diversified customer base across sectors like oil & gas, defense, and infrastructure, Jindal is deeply embedded in India’s growth story.

The company generated ₹393 billion in revenue in FY25—a 2% YoY increase. Although profit dipped 7% to ₹25 billion due to rising costs, the long-term outlook remains strong. Stainless steel demand in India is expected to grow at 8-10% annually, and with per capita consumption still at less than half the global average, there’s a lot of room to grow.

Jindal Stainless is also investing ₹57 billion in expanding operations, including a JV in Indonesia and acquisitions in Gujarat. Government infrastructure projects like Vande Bharat and Gati Shakti are set to fuel demand further.

LIC’s Takeaway: A resilient domestic champion with a clear growth runway in infrastructure and industrialization—Jindal Stainless offers both scale and sustainability.

3. KPIT Technologies: Powering the Future of Mobility

A quieter player in the buzzing tech space, KPIT Technologies focuses on software and engineering solutions for global automobile OEMs. From electric powertrains to autonomous systems, KPIT is aligned with the future of mobility.

In FY25, the company posted a 20% jump in revenue to ₹58 billion and a 41% rise in net profit to ₹8.4 billion. Geographically diversified, KPIT draws 48% of its business from Europe, 27% from the US, and is rapidly expanding in Asia, which saw a staggering 71% YoY growth.

While passenger vehicles remain the key driver, the company is moving into commercial and off-highway vehicles, cybersecurity, and connected mobility platforms. Strong cash flows and stable EBITDA margins (~21%) make it a tech play with a solid foundation.

LIC’s Takeaway: KPIT represents the evolving face of auto tech—innovative but not speculative, profitable but not flashy.

So, What Does LIC Know That We Don’t?

At first glance, these might seem like unusual additions for a conservative investor. But look closer, and they make perfect sense.

• IRFC brings in stable, sovereign-backed returns with minimal risk.
  
  

• Jindal Stainless stands at the intersection of infrastructure growth and industrial resilience.
  
  

• KPIT Technologies is a forward-looking tech firm with dependable financials and exposure to global mobility trends.
  
  

None of these companies are recent market darlings. Instead, they represent well-positioned, well-managed businesses with long-term relevance. LIC isn’t chasing hype—it’s betting on India’s steady transformation and the foundational industries that support it.

In short, these additions signal a cautious yet thoughtful broadening of LIC’s portfolio, embracing new opportunities without straying from its core investment philosophy.

Conclusion

LIC’s quiet moves speak volumes. By adding IRFC, Jindal Stainless, and KPIT Technologies, LIC is telling us something simple yet profound: Real opportunities don’t always come with buzz and volatility. Sometimes, the most promising investments are the ones quietly working behind the scenes—much like LIC itself.