JSW Steel shares rose 3% on Monday as street sentiment turned in favour of the Sajjan Jindal-led steel company after India’s state insurer Life Insurance Company (LIC) increased its stake in the steel company. JSW Steel shares at Rs 678.75, up 2.6% on the BSE. The stock has hit an intraday high of Rs 680.50 so far.

As the long-term outlook for the steel industry remains unchanged, LIC has raised its stake in JSW Steel to 7% from the previous 5%, investing around Rs 3,200 crore.

JSW Steel said in a statement that the national insurance giant acquired 4.86 crore shares or 2.01% from the open market between August 3 and September 1 at an average cost of Rs 649.83. This is on top of LIC’s existing 5.002% stake or 12.09 crore shares.

JSW Steel, the flagship company of the diversified JSW Group, is the country’s leading integrated steel company with a production capacity of 28 MTPA (million tonnes per annum) in India and abroad.

Meanwhile, LIC shares traded lower on the exchange, down well over 0.5%. LIC shares were trading at Rs 661 per share at 1.03 pm, down 0.59% on the BSE. Insurance stocks have hit an intraday low of Rs 660.50 so far.

LIC was listed on the exchange on May 17 this year at Rs 867.20, an 8.6% discount to the issue price of Rs 949.

Earlier, a Credit Suisse report warned that the elasticity of domestic steel prices is unlikely to last as Dalal Street is wary of steel prices.