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LIC to slow stock investments after bumper buy

Reuters  |  MUMBAI 

By Suvashree Choudhury

(Reuters) - State-owned Life Corp of (LIC) will likely slow stock purchases for the rest of the fiscal year after nearly doubling its in the first half from a year earlier.

LIC, with assets of 27.26 trillion rupees ($423.3 billion) as of end-September, had a target of investing 500 billion rupees in stocks through the year which ends in March.

During the first six months of that period, LIC's more than doubled from a year earlier to 392.24 billion rupees. As of end-November it had bought equities worth about 440 billion rupees, top executives said.

They added they would look at opportunities to take some profit off the table.

Powered by strong fund inflows, Indian markets have hit a string of record highs this year, with the main market index gaining nearly 24 percent year-to-date.

"We will sell wherever we have opportunity," V.K. Sharma, LIC's chairman, told reporters. "We are contrarians and market is at peak."

The surge in LIC's equity to date has been partly driven by the insurer subscribing to some of the stakes being sold by the Indian government in a clutch of companies as part of its asset sales programme.

bought shares worth 180 billion rupees in companies where the government sold part of its holdings - including 120 billion rupees in initial public offerings of state-run General Corp and New Assurance Co, top company executives said.

The government has raised about 524 billion rupees from the asset sales programme this fiscal year, crucial to help it meet its fiscal deficit target of 3.2 percent of gross domestic product in 2017/18.

On the debt side, LIC, which is a big supporter of the government's bond-borrowing programme, bought 1.61 trillion rupees worth of federal and state government bonds during the first half of the fiscal year, Chairman Sharma said.

It aimed to make additional purchases of 100-200 billion rupees worth of government debt securities by March, he added.

($1 = 64.3950 Indian rupees)

(Writing by Devidutta Tripathy)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 05 2017. 20:10 IST