The Life Insurance Corporation of India has acquired 700,000 shares of Telco and 1.5 million shares of Larsen & Toubro from the custodian appointed by a special court that heard the 1992 stock scam cases, for Rs 39.85 crore (Rs 398.5 million).

LIC picked up the L&T stock for Rs 175 a share and Telco at Rs 155. These deals were passed by the special court order recently.

LIC chairman S B Mathur confirmed that the corporation has acquired Telco shares from the custodian at less than the market price.

The corporation had last week picked up over 2.5 million shares of Reliance Industries. Telco officials refused to comment on the deal.

The shares are part of the portfolio owned by the late Harshad Mehta, which was attached following the 1992 securities scam and has since been put up for auction.

LIC has been aggressively picking up the Big Bull's portfolio, which has an estimated market value of Rs 1,000-1,500 crore (Rs 15 billion). LIC has picked up over Rs 300 crore (Rs 3 billion) of Mehta's stocks.

On the Bombay Stock Exchange, the L&T scrip edged up 1.62 per cent to close at Rs 191.60, while Telco shed 2.12 per cent to settle at Rs 163.85

Mathur told Business Standard that, given the right price, LIC would be willing to buy more of Harshad Mehta's attached portfolio.

The custodian has been calling for offers from institutional buyers, both domestic and foreign  as well as the management of the respective companies for the "bulk category" of shares.

The custodian has been selling property and small shareholdings, but the bulk holdings of the late Mehta's equity portfolio were put on the block only recently.

In January, LIC picked up shares worth Rs 200 crore (Rs 2 billion) from Big Bull's portfolio including those of Hero Honda (6 million shares, 7.5 per cent of the company's paid-up capital), ITC (470,000), Hindustan Lever (630,000), Castrol (1.118 million), Tata Tea (730,000) and Gujarat Ambuja (2.326 million).

LIC had also bid for 450,000 shares of ICICI Bank, but lost out on the deal to another institutional bidder, Mathur confirmed.

Market players believe that LIC is the only institution capable of picking up such huge blocks of blue chips in a single deal, as others can't fulfill the condition of picking up the entire quantity. LIC's decision to buy these shares is in line with its plan to increase its exposure to equity.