Property development attracts LIC

Public sector giant Life Insurance Corporation of India expands its business focus to property development.

India's buoyant property development business has begun attracting the attention of international majors, who are eager to enter the business, especially after the Indian government threw open the sector to 100 per cent foreign direct investment (FDI).

But domestic giants, including the two largest owners of prime property in the country – Indian Railways and Life Insurance Corporation of India – have also begun showing interest in this burgeoning sector.

The phenomenal growth in property prices, especially in cities like Mumbai, Bangalore, and Delhi (including Gurgaon), and even in two-tier cities like Pune and Coimbatore, has aroused LIC's interest, which already has a significant presence (through its housing finance subsidiary) in the mortgage business.

Facing stiff competition in the life insurance business, which was thrown open to competition in 2000, LIC is now planning to pursue real estate development aggressively, a business where it has had significant experience. LIC had developed residential townships, including in cities like Mumbai, in the 1970s, and has made a successful business of what is after all not a completely unrelated business.