Mumbai: Life Insurance Corp. of India (LIC), the nation’s biggest insurer, plans to raise investment by as much as 15% this fiscal year to keep pace with premium growth, the company’s managing director said.
The company will put as much as Rs1.15 trillion ($28 billion) in stocks and bonds in the year that began 1 April, D.K. Mehrotra said. The Mumbai-based insurer’s investments currently exceed Rs6 trillion, he said. “We will continue to focus on high-yielding assets such as corporate bonds and long-term government debt,” Mehrotra said in a phone interview. “We expect corporate bonds to remain attractive in the current financial year as well.”
The added investment by LIC may help India meet rising demand for funds to fuel the second-fastest growth rate among major economies. India estimates it needs as much as $320 billion by 2012 to build roads, ports and power plants.
LIC slowed government debt purchases in the year through March to focus on higher-yielding corporate bonds. Investment in corporate debt grew “many times” to almost Rs10,000 crore, V.K. Kukreja, head of investments, said without elaborating. LIC purchased Rs43,000 crore of government debt last fiscal.