LIC Locks in a .₹ 16k-cr Profit from Eq­uity Sales

Last fi­nan­cial year, the cor­po­ra­tion had earned a profit of .₹ 9,500 cr from eq­ui­ties

The Economic Times - - Finance & Commodities - Shilpy.Sinha@ times­group.com

Mum­bai: Life In­surance Corp, the coun­try’s big­gest in­sti­tu­tional in­vestor locked in an im­pres­sive 68% jump in prof­its, about .₹ 16,000-crore, from eq­uity sales in the first nine months of the fi­nan­cial year.

Last fi­nan­cial year, the cor­po­ra­tion had earned a profit of .₹ 9,500 crore from eq­ui­ties in the same pe­riod. Its eq­uity in­vest­ment was sub­dued for the pe­riod as it has in­vested .₹ 39,000 crore against .₹ 64,000 crore in the same pe­riod last year.

“We have booked prof­its of .₹ 16,000 crore in the year so far by sell­ing about .₹ 38,000 crore of eq­uity,” said V K Sharma chair­man LIC. “We are a con­trar­ian player and we have de­lib­er­ately taken this de­ci­sion given the way mar­kets have moved.”

He said that eq­uity is only 12% of their in­vestible cor­pus. Sharma did not talk about in­di­vid­ual stocks that LIC has in­vested in. “We are not a trader but longterm in­vestor,” he said.

LIC in­vested around .₹ 1.98 lakh crore in debt in­stru­ments, in­clud­ing .₹ 1.83 lakh crore in gov­ern­ment ser­vices and state de­vel­op­ment loans.

The cor­po­ra­tion has in­vestible sur­plus but its eq­uity in­vest­ments are sub­dued be­cause of LIC’s profit from share sale in first 9 months of FY 16-17

Co’s profit from share sale in first 9 months of FY15-16 the cur­rent mar­ket con­di­tions. LIC had un­suc­cess­fully bid for a siz­able stake in BEL. “This shows that the mar­ket is deep­en­ing and more play­ers are in­ter­ested in buy­ing pub­lic sec­tor com­pa­nies.”

“We vi­su­alised that in­ter­est rate will fall and so we gave push to pen­sion plan,” said Sharma. It has posted a growth of 12.43% in to­tal pre­mium in­come at .₹ 1,45,031 crore dur­ing the nine months ended De­cem­ber 2016. In the same pe­riod last year, it had done to­tal pre­mium of .₹ 1,29,001 crore. New busi­ness in­come grew 40.11% in the nine-month ended De­cem­ber 31, 2016, boosted by fund flow into for­mal sys­tem dur­ing de­mon­eti­sa­tion. “We met our yearly tar­get of .₹ 31,000 crore new busi­ness in­come a month be­fore the year end,” said Sharma. LIC op­er­ates through 40,000 col­lec­tion points, where col­lec­tion dipped in the first 15 days af­ter the ban on high cur­rency notes of .₹ 500 and .₹ 1,000 on Novem­ber 8. How­ever, it im­proved over the next few days and now 75% of the col­lec­tion hap­pens through dig­i­tal pay­ment mode. For the in­surer 6.5 crore trans­ac­tions are hap­pen­ing through dig­i­tal. It is in the process of in­te­grat­ing its sys­tem to BHIM and UPI. To­tal pre­mium in­come in first 9 months of FY16-17 To­tal pre­mium in­come in first 9 months of FY15-16 In­vest­ment in debt in­stru­ments

In­vest­ment in govt ser­vices loans

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