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| LIC to invest Rs 80,000 cr to match last year's figures |
| BS Reporter / Mumbai Jan 13, 2012, 00:40 IST |
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Equity investments have slowed, with drop in Ulips.
 In a last-ditch effort to match last year’s investment figures, Life Insurance Corporation of India (LIC), the largest domestic institutional investor in the country, is looking to invest Rs 80,000 crore in debt and equities during the Jan-March period of this financial year. Of this Rs 15,000-20,000 crore would be invested in equities, with the rest going to debt instruments, a top official said on Thursday.
During 2011-12, it invested Rs 1.15 lakh crore, of which Rs 25,000 crore was in equities, said LIC chairman-in-charge D K Mehrotra. “Of around Rs 90,000 crore debt investments, a large part of it has gone to government securities, whereas 25-30 per cent went in corporate instruments. Our total investment would remain close to last year’s figures,” Mehrotra added on the sidelines of a press conference.
In 2010-11, LIC invested Rs 1.95 lakh crore, of which Rs 43,000 crore was in equities.
Equity investments by life insurers has slowed in the current financial year, largely because of the drop in sales of unit-linked insurance products, which accounted for nearly 80 per cent of the industry sales. For LIC, too, the product mix between traditional and unit-linked insurance plans (Ulips) has come to 70:30 from 55:45 earlier.
In Ulips, 90 to 95 per cent of the funds are deployed in equity, whereas for traditional plans only 10 per cent goes into equities.
During the April-November period, LIC’s premium collection dropped 18 per cent to Rs 45,759 crore. In the same period, the life insurance industry premium collection was down 19 per cent to Rs 62,429 crore largely on account of the new regulations by Irda, which had impacted the sales of unit-linked policies across the industry.
Housing Finance to raise Rs 500 cr
LIC Housing Finance (LICHF), the mortgage financing arm of LIC, is going to raise Rs 500 crore via its maiden venture capital fund, an urban development one. LICHF has already mopped up Rs 200 crore in the first tranche and would be looking to achieve the final closure in the next seven-eight months.
“We have already raised Rs 200 crore and will start deploying soon. The fund aims to make investment in companies involved in development of mid-income affordable housing, income yielding to micro infrastructure assets including industrial and IT parks, SEZ and other allied segments through equity and equity related instruments,” said V K Sharma director and chief executive, LICHF. Both LIC and LICHF has invested Rs 50 crore each in the fund, he said.
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