LIC books record profit of Rs 20,000 cr in 2012-13
The last financial year was among the best for LIC (Life Insurance Corporation) of India that booked a profit of Rs 20,000 crore — highest in around 7-8 years. The insurance behemoth now intends to invest Rs 2.15 lakh crore in the current fiscal out of which 10% or Rs 21,500 crore will be in equities.
According to LIC chairman D K Mehrotra, the insurance major got a lot of opportunities to book profits in FY13, which also saw the government-owned entity investing Rs 23,000 crore in equity. “The profit that we booked last year has been the highest in the last almost seven-eight years because we did get good opportunities” he told a leading business channel on Monday.
The head of LIC, who is due to retire next month, says the largest domestic institutional investor plans to invest about Rs 2.15 lakh crore in the market in the current financial year, of which 10-15% will be in equities. “This year we are proposing to put about Rs 2.15 lakh crore in the market and it will again depend on the opportunities when we get them... we have a thumb rule of putting 10-15% in equity and rest in other instruments,” he said.
Incidentally, LIC chief had told FE in March that FY14 should see LIC “having a total investment target of, say, Rs 2.25-2.3 lakh crore.”
“Of that, about 10% should go to equity. If something better comes, say, an IPO comes, we should raise it a bit. About Rs 25,000-30,000 crore,”
he had said when asked about the investment plans for the current financial year. It is widely believed LIC would be in focus once the divestment issues start hitting the market in the coming months. The government has set a target of Rs 40,000 crore by selling partial stake in listed PSUs. In FY13, LIC participated in seven divestment offerings - Hindustan Copper, NMDC, Oil India, NTPC, Rashtriya Chemicals and Fertilizers (RCF), Nalco, and SAIL.
Mehrotra, however, had denied being labelled the government’s “bailout agency” asserting that all of LIC’s investment decisions were based on its own assessment of market conditions and the fundamentals of the company.
“We are not in the business of bailing out. We take a very reasoned decision before entering the market and wherever we get a good opportunity, we participate. Only when somebody sells, somebody will buy and if that is called a bailout, then I can’t help it,” he had said last month.