The final accounts of the life major for 2006-07 are presently under audit, but it is expected that gains from investments would be over Rs 5,000 crore.
KOLKATA: After pushing up its stake in Maruti from 10.32% to 14.8% recently, the Life Insurance Corporation (LIC), one of the largest institutional investors, hopes to take its total investible funds past the Rs 1.17 lakh crore mark this fiscal. Out of this, it plans to invest Rs 11,000 crore into equities.
The final accounts of the life major for 2006-07 are presently under audit, but it is expected that gains from investments would be over Rs 5,000 crore.
LIC is also keen on further strategic investments.
D K Mehrotra, managing director, LIC told DNA Money, “In the year 2006-07, our total investments in the stock markets was around Rs 25,000 crore, taking into account the unit-linked portfolio. Our total investible funds are likely to go up substantially in the current year. This has been with the premium profits and the surplus funds from bond redemptions.”
“As far as new strategic investments are concerned, we will be reviewing any opportunity that comes our way. Through the Maruti deal, we bought 3.2 crore shares, which helped us increase our stake in the company,” said Mehrotra.
Leaving out the Ulip investments, LIC’s investment in equities was in the range of Rs 9,000-10,000 crore.
LIC would put about 10% of its investible funds into equities this year, amounting to about Rs 11,000 crore.
“In terms of our liability profile, we are not guided by immediate volatility. LIC is comfortable with many sectors and we are interested in a host of sectors like telecom and infrastructure,” Mehrotra added.
Among other investments in 2006-07, LIC had invested around Rs 43,000 crore and Rs 17,000 in government securities and infrastructure bonds respectively. It raised its investment in corporate debt to Rs 13,000 crore, which was a sharp rise from the previous year and most of this was in the upper Tier 2 capital of banks.
LIC registered a 118% growth in new business premium to Rs 55,934 crore in 2006-07, almost 70% of it coming from unit-linked plans. “This has been a sharp rise from around 42% the previous year as these plans were the flavour of the market. We may come up with some more products provided there is a demand for such plans this year,” added Mehrotra.
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