BackLIC to invest Rs50,000 crore in equity market this fiscal: chairman
LIC also plans to invest Rs2.50 trillion in bonds
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New Delhi: India’s largest insurer, Life Insurance Corp. of India (LIC), plans to invest about 50,000 crore in the equity market, taking its total investment including in bonds to 3 trillion during the current fiscal.
“We plan to invest about 50,000 crore in the equity market, while 2.50 trillion in bonds," LIC chairman S.K. Roy said. He said LIC picked up stocks worth 51,000 crore last fiscal and investments were made across sectors.
As for the bond market, he said investment in this area was 2.40 trillion in the last financial year. Equity markets have rallied about 20% so far this fiscal. During the current fiscal, the life insurer has raised its stakes in many public sector banks including United Bank of India, Central Bank of India and Bank of Maharashtra by picking up preferential shares. Some more banks would make preferential allotment to LIC during course of the year.
Besides, the government has also announced disinvestment road map for the current fiscal. The process for disinvestment in Oil and Natural Gas Corp. Ltd (ONGC) and NHPC Ltd, among others, has already been started. Also, the government is looking to sell a 5% stake in Steel Authority of India Ltd (SAIL) and 10% each in Rashtriya Ispat Nigam Ltd (RINL) and Hindustan Aeronautics Ltd (HAL) in the current fiscal besides an outright sale of Tyre Corp. of India.
The disinvestment of 10% through an initial public offer (IPO) in RINL is tentatively scheduled for completion in the current financial year. LIC has been a key investor in the disinvestment initiative of the government. In the Union budget, the government has estimated to collect 43,425 crore from selling stake in public sector undertakings (PSUs) and another 15,000 crore from the sale of residual stake in erstwhile government companies.
During the first quarter ended June of the 2014-15 fiscal, LIC earned a total premium of 14,016 crore, lower than the 14,295 crore in the year-ago period. The life insurance sector with 24 players earned a total premium of 19,699 crore in the April-June period of 2014-15. LIC with a 75% market share collected 41,441 crore from individual premiums and 48,682 crore of group premiums, aggregating to 90,124 crore.
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