LIC REGISTERS WINDFALL GAINS DURING APR-AUG
MUMBAI: Life Insurance Corp. of India (LIC) booked a profit of ₹12,000 crore from equity investments in the five months between April and August, three people aware of the matter said, as markets shot up following the crash in March.
The development could lead to higher bonuses for policyholders and better valuation for the upcoming IPO of the country’s largest insurer.
Thanks to the windfall, the first half of the fiscal year may turn out to be the best ever for LIC, which is India’s largest institutional investor with assets worth around ₹34 lakh crore, the people cited above said on condition of anonymity.
“This profit booking of ₹12,000 crore is 10-12% higher than last year’s number for the same period when even markets were better than this year. Possibly, this is the best ever profit booking for LIC in just five months, especially considering the fact that during April and May, LIC was not selling any equity; it was only buying into equities. The profit-booking happened from sales only during June, July and August,” one of the three people said.
“LIC has sold shares worth around ₹21,000 crore since April and has bought equities of around ₹32,000 crore so far. Most profit-booking came from the sale of stocks that had appreciated beyond LIC’s estimated gains. Only a few stocks that were bought in the March quarter market lows have been sold after June when the markets started going up and those stocks gained,” the second person added.