Foreign investors have been exiting Indian stocks for months now. In the March quarter, their shareholding in NSE-listed stocks fell to a 14-year low of 16%.
There’s fear that India’s tech giants can’t keep up with the AI race. A weakening rupee has also added to the pressure—so much that Prime Minister Narendra Modi
But every time foreign money leaves Indian shores, somebody else fills the gap.
In the first three months of 2026 alone, LIC, the state-backed insurer,
For years, LIC has doubled up as the friend in need for Indian stocks. A steady cash flow from millions of policyholders meant the insurer remained one of the country’s largest domestic institutional investors. LIC used to be “the sole player which carried the ‘heft’ to shoulder a market fall,” said Pranav Haldea, managing director of market-data provider Prime Database.
That role has been changing of late.
Every month, retail investors are pouring money into mutual funds through SIPs, despite market volatility and foreign selling. In fact, mutual funds’ assets under management have grown faster than LIC’s since the pandemic.
The result is that India has another large domestic pool of capital to steady the markets when foreign investors sell.
Yet, LIC can’t be ignored.
The value of its stake in the top 500 NSE-listed companies has risen by over 250% to Rs 15 lakh crore over the past six years. The insurer continues to buy when others turn cautious and starts selling when markets turn “euphoric”. Fund managers and analysts repeatedly likened LIC’s investment style to that of a “contrarian investor”.
And that makes LIC’s own stock-market performance a puzzling piece.