LIC Ditches Private Banks, Boosts PSU and Yes Bank Holdings Amid Value Hunt

LIC, India's largest institutional investor, has shifted its portfolio by slashing stakes in HDFC Bank, ICICI Bank, and Kotak Mahindra Bank, while aggressively accumulating shares in PSU State Bank of India (SBI) and Yes Bank. This move reflects the resilience of PSU banking and the attractiveness of the segment, which is expected to see bright prospects with the coming merger of PSU banks. Foreign investors have poured over $14 billion into India's private banking sector in 2025, raising concerns about high expectations baked into PSU bank valuations.