labels: lic, investment - general
Sale of its investments helps LIC post Rs 1,500-crore profitsnews
Nisha Das
20 October 2003

Mumbai: Life Insurance Corporation of India (LIC) has booked a profit of about Rs 1,500 crore from selling its investments during the last nine months ended 30 September. In January-March period when the Sensex was ruling at 2900, LIC invested in equities while foreign financial investors (FIIs) were virtually absent in the market.

LIC then accounted for more than 10 per cent of the deliverable turnover in the market, according to senior LIC officials. "We feel it is prudent to book profits at a certain level of prices and we did it. We have sold the marginal holding in most of the companies where we have investments."

In the last fiscal, LIC had invested Rs 35,000 crore in the corporate sector and Rs 21,000 crore in equities. The company's total investments in the current fiscal (up to July) amounted to Rs 30,000 crore, of which 74 per cent are in central government securities and 16 per cent in state government securities.

LIC has sold around 10 per cent stake in Associated Cement Companies, 1 per cent stake each in ITC Ltd, Bharat Petroluem Corporation and Grasim Industries. The corporation has also sold less than 1 per cent stake in Bajaj Auto, various Tata group firms and Hindustan Petroleum Corporation.

"We have investments in all the leading listed companies," say the officials. "Selling a huge chunk of ACC shares was part of our plan to bid for Harshad Mehta's 9.5-per cent stake in ACC." LIC had acquired Mehta's ACC shares for a total consideration of Rs 275 crore.

The Sensex has appreciated over 1500 points in the last four months to close at 4855 on 15 October as against the 3200 levels in June with most of the above stocks where LIC has booked profits going up anywhere between 20 and 60 per cent.

In Bajaj Auto's case the scrip has steadily increased from Rs 467 levels in June to Rs 731 levels in September, an appreciation of around 67 per cent. Similarly others like HP, BP, Grasim and Tata group companies Tisco and Tata Motors have shown considerable appreciation in share prices, which has lead LIC to book profits at higher levels.

During the fiscal 2002-03, LIC had invested Rs 6,000 crore in equities. Last year the corporation had booked profits to the extent of Rs 900 crore in equities trading.

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Sale of its investments helps LIC post Rs 1,500-crore profits