FY target almost exhausted, LIC to slow down equity investment
ET Bureau|
Updated: Dec 06, 2017, 08.10 AM IST
Mumbai: Life Insurance Corporation of India (LIC) will not aggressively invest in equities for the remaining part of the year, having almost exhausted its equity investment target already, a top official said.
The corporation has invested Rs 44,000 crore in equity in April-November, a 50 per cent jump over Rs 29,000 crore that it invested during the same period last year.
“We will not be aggressive in buying equities, but will continue to buy and sell in the stock markets as we are a large financial institution,” said V K Sharma, chairman at the life insurance giant. LIC had invested Rs 47,000 crore in equities in the whole of 2016-17. This fiscal, it was expected to invest Rs 50,000 crore in equities. LIC will continue to book profit as stocks go up and buy whenever it sees an opportunity, Sharma said.
LIC has seen some dip in income from investments in debt instruments due to falling interest rate.
Sharma said that LIC wants to invest more in government securities as it will be beneficial for policy holders and pensioners. “We will like RBI to issue more long-dated securities as our appetite for g-sec is another Rs 10,000 to Rs 20,000 crore in the coming four months of this fiscal,” said Sharma.
On holding investments above 15 per cent, Sharma said that unless there is strategic consideration the firm’s approach is to bring it down over a period of time. The insurance regulator had asked LIC for a roadmap to reduce stake in companies where it owns above the stipulated 15 per cent stake.
The corporation has bought 8.2 per cent in GIC Re during its IPO and 8 per cent in New India Assurance. Sharma said that in the long term these investments are better than banks.
LIC has posted 16.26 per cent increase in its profit from sale of equities during April-September at Rs 12,374 crore, up from Rs 10,643 crore in the same period last year. “As things stand today, we should be able to surpass our new business income target because there is positive environment for life insurance and the insurance regulator is giving product approvals (early),” said Sharma.
The corporation has invested Rs 44,000 crore in equity in April-November, a 50 per cent jump over Rs 29,000 crore that it invested during the same period last year.
“We will not be aggressive in buying equities, but will continue to buy and sell in the stock markets as we are a large financial institution,” said V K Sharma, chairman at the life insurance giant. LIC had invested Rs 47,000 crore in equities in the whole of 2016-17. This fiscal, it was expected to invest Rs 50,000 crore in equities. LIC will continue to book profit as stocks go up and buy whenever it sees an opportunity, Sharma said.
LIC has seen some dip in income from investments in debt instruments due to falling interest rate.
Sharma said that LIC wants to invest more in government securities as it will be beneficial for policy holders and pensioners. “We will like RBI to issue more long-dated securities as our appetite for g-sec is another Rs 10,000 to Rs 20,000 crore in the coming four months of this fiscal,” said Sharma.
On holding investments above 15 per cent, Sharma said that unless there is strategic consideration the firm’s approach is to bring it down over a period of time. The insurance regulator had asked LIC for a roadmap to reduce stake in companies where it owns above the stipulated 15 per cent stake.
The corporation has bought 8.2 per cent in GIC Re during its IPO and 8 per cent in New India Assurance. Sharma said that in the long term these investments are better than banks.
LIC has posted 16.26 per cent increase in its profit from sale of equities during April-September at Rs 12,374 crore, up from Rs 10,643 crore in the same period last year. “As things stand today, we should be able to surpass our new business income target because there is positive environment for life insurance and the insurance regulator is giving product approvals (early),” said Sharma.
