ICICI Prudential Mutual Fund has increased its stake in LIC Housing Finance , crossing the 5% threshold that triggers mandatory disclosure under SEBI regulations. The fund house acquired 12,95,540 shares on December 2, 2025, through secondary market purchases, raising its total shareholding from 4.98% to 5.22% of the company's paid-up capital.

Key Details of the Transaction

Regulatory Compliance

The increase in shareholding beyond the 5% mark has triggered the disclosure requirements under the Securities and Exchange Board of India (SEBI) Substantial Acquisition of Shares and Takeovers Regulations, 2011. ICICI Prudential Mutual Fund has informed the stock exchange about this transaction, adhering to regulatory norms.

Investment Strategy

ICICI Prudential Mutual Fund has stated that this acquisition is purely for investment purposes. The fund house clarified that it does not seek any controlling interest in LIC Housing Finance, emphasizing that the purchase aligns with its investment strategy across various schemes.

Market Context

While this transaction represents a significant holding by a major institutional investor, such movements by mutual funds are common and part of their portfolio management strategies. Investors in LIC Housing Finance and market participants may view this increased stake by ICICI Prudential Mutual Fund as a sign of confidence in the company's prospects.

Conclusion

This transaction highlights the dynamic nature of institutional investments in the Indian equity market. As mutual funds continue to play a crucial role in capital allocation, such stake changes offer insights into the investment preferences of large fund houses.

LIC Housing Finance , one of India's leading housing finance companies, reported its Q2 results, showcasing stability in financial performance while facing growth challenges. The company's focus on maintaining profitability over aggressive expansion was evident in the quarterly figures.

Financial Highlights

Key Performance Indicators

• Net Interest Margin (NIM): Stood at 2.62% compared to 2.71% in Q2 FY25.
• Asset Quality: Stage-3 exposure improved to 2.51% from 3.06% year-on-year.
• Provision Coverage Ratio: Increased to 53% from 49% in the previous year.
• Cost of Funds: Declined to 7.42% from 7.73% year-on-year.

Business Performance

LIC Housing Finance faced significant challenges in growth during Q2. The company reported:

• Total disbursements of Rs. 16,313 crores, marginally lower than Rs. 16,476 crores in Q2 FY25.
• Individual home loan disbursements grew by 3% YoY to Rs. 13,490 crores.
• Project loan disbursements were muted at Rs. 378 crores, down from Rs. 1,397 crores in Q2 FY25.

A notable concern was the substantial increase in balance transfer outflows, which doubled to Rs. 4,014 crores from the normal quarterly run rate of Rs. 2,000 crores. This surge in balance transfers significantly impacted the company's growth trajectory.

Strategic Initiatives

To address growth challenges, LIC Housing Finance has implemented several measures:

1. Rewriting Rates Adjustment: The company reduced rewriting rates to lending rate plus 50 basis points to combat balance transfer pressures.
2. Exploring New Avenues: Management is considering co-lending arrangements and direct assignment to boost growth.
3. Focus on Margin Protection: The company maintains a stance of prioritizing margin protection over aggressive expansion.

Management Commentary

Tribhuwan Adhikari, Managing Director and CEO, commented on the results: "We are balancing growth with spreads and NIMs in this challenging year. While our growth has been subdued, we are taking steps to improve our competitive position without compromising on profitability."

Outlook

LIC Housing Finance remains cautiously optimistic about the future. The management expects:

• Improvement in asset quality in the coming quarters.
• Potential resolution of two to three large loans (Rs. 200 crores and above) in the near term.
• Better performance in Q3 and Q4, which are traditionally strong quarters for the company.

The company aims to achieve double-digit growth in both disbursements and loan book by the end of FY26, while maintaining focus on profitability and asset quality.

As LIC Housing Finance navigates through a competitive landscape, particularly from aggressive public sector banks, it continues to explore strategic options to enhance growth while maintaining financial prudence.