LIC to invest 10k crore in equities in Q4

LIC to invest 10k crore in equities in Q4

Life Insurance Corporation of India (LIC), the country’s largest insurer and the biggest life insurer, has invested `70,000 crore in equities till the end of the third quarter ended December 31, 2017, and it plans to invest another `10,000 crore before the end of the financial year.

The insurer had slowed investments in equities in December and January as markets were at elevated levels. But with recent corrections, LIC has resumed its equity purchases.

VK Sharma, chairman, LIC, said, “Equity investment has gone up because its a continuous process, we have the funds and we have to invest that money. We are contrarian, but our investments is not buying and selling, it is long term investments. We are now handpicking good companies with a long-term view, and we have improved our purchasing after the recent correction.”

He also added that, LIC has earned `20,000 crore from sales of equity investments in the financial year till December, up from `16,000 in the last fiscal.

In the last financial year, LIC had invested `47,000 crore in the equity markets. If the state-run life insurer manages to invest another `10,000 crore to take its total investments to `80,000 crore for the financial year, it will spell a 70% year-on-year increase.

Speaking at a press conference in Mumbai, Sharma said that the recent problems at Punjab National Bank (PNB) were an unfortunate event. “But still, as a person or a institutional head, I have full faith in the bank and we are going to hold on to our investments,” added Sharma. After the crisis hit PNB, the market cap of the bank eroded by `8,732 crore – this translated to a loss of `1,217 crore to LIC. As on December 2017, LIC held a 14% stake in the second-largest public lender.

In terms of new business performance, the nine months ended December 2017 has seen a growth of 19.47% in its first-year premium to `99,783.33 crore. Total assets stood at `28,51,190 crore, compared to `24,41,946 crore at the end of the corresponding period last year, implying a growth of about 16.75%.

The LIC chairman added that, if the recently announced National Health Protection Scheme (NHPS) clicks, the next 10-15 years will belong to the general insurance companies.