LIC to invest Rs3,00,000 crore this fiscal: report
06 August 2014
Overall investments by the Life Insurance Corporation (LIC) of India are expected to increase by 20 per cent from Rs2,50,000 crore to Rs3,00,000 crore in the current financial year ending 31 March 2015, bulk of which would be in debt securities, chairman S K Roy told a news channel.
The state-run insurer is looking to invest around Rs45,000 crore in equities alone in the current financial year, Roy told news channel ET Now in an interview.
Roy said about 15 per cent of the overall investment of Rs3,00,000 crore (or around Rs45,000 crore) will be invested in equity while the remaining will be invested in debt securities of various maturities.
LIC, he said, is positive about the economy and that barring a likely offloading by foreign investors towards the end of the year in order to cash out, the market is in a good state.
Roy said while LIC's equity investments are subject to market conditions and opportunities, the corporation remained a long-term investor and short-term market fluctuations did not affect its investments.
He also told the channel that while LIC invests in the market for a profit it cannot act like a broker or foreign portfolio investor and book a profit every time the market buoys.
''We are very long-term investors; every time the market rises, it is not profit-booking time. We have liabilities that are 30 years old.
''These investments will have to live out the tenure so that we meet our liabilities in the distant future. But, there could be an opportunity for churning, which we did last year.''
Roy said he is positive on Indian stocks and neither a tight money policy nor delayed rains would have any impact on the stock markets.
"I see further upside for market in FY15," Roy told the channel, adding, ''I think the RBI holding rates is positive for markets.''
LIC, he said, is more bullish on sectors like infrastructure and real estate, and sectors that support them. Besides, LIC has traditionally favoured industries such as information technology, banking and pharma.
He also hinted at investing in banks - a sector, Roy said, LIC would like to remain invested in, subject, of course, to regulatory limits.
Meanwhile, the insurance sector regulator has asked insurers to become more active on issues related to corporate governance in companies they have invested in.
As of now, insurance companies hold significant stakes in listed entities in India, with LIC alone managing assets of over Rs1,30,000 crore of the total Rs1,900,000 crore of asstes managed by insurance companies together.