From DHFL to Gammon India, here're LIC's exposure to default-rated debts

State-owned insurance behemoth Life Insurance Corporation (LIC) has an exposure of more than Rs 13,500 crore to debt instruments of various entities that have been downgraded to default ‘D’ grade by credit rating agencies.

This exposure of LIC is across various platforms such as life funds, pension funds, and unit-linked funds. One of its largest exposures in the debt portfolio that has been downgraded to default is of mortgage lender Dewan Housing Finance Limited.  LIC has an exposure of Rs 6,120 crore in DHFL with Rs 2,740 crore in its pension fund and Rs 3,380 crore in life fund.

Similarly, in debentures of Reliance Communication, LIC has an exposure of Rs 1,570 crore which have been downgraded to junk category.

LIC has also has huge exposure to companies that became the first ones to be referred to the National Company Law Tribunal (NCLT) after the Insolvency and Bankruptcy Code (IBC) came into existence. 

Among the 12 companies, LIC has exposure to companies like ABG Shipyard, Alok Industries, Amtek Auto, Era Infra Engineering and to the Jaypee Group, which have also been downgraded to default. LIC’s debt exposure in top default-rated debt instrument of entities.