LIC arm to launch VC fund soon
LIC Housing Finance (LHFL), an arm of Life Insurance Corporation (LIC), the country’s largest insurer, is planning to launch a venture capital firm next month, as part of a policy to start a new company every year.
LHFL’s director and chief executive, R R Nair, told Business Standard the company wants to focus on fee-based and other income, which is why it is launching a new company every year. He said they’d launched a financial services company last year, the year before that, a mutual fund, and earlier, LIC HFL Care Homes. The venture capital company will be launched in September, in a joint venture with a domestic firm, in which LHFL will be major share holder. Five prospective partners have been shortlisted. The size of the first fund will be Rs 500 crore, said Nair.
He said LHFL had set a target to disburse Rs 13,000 crore in 2009-10, compared to Rs 8,700 crore last year, an increase of 40 per cent. By the end of the current financial year, the company’s total loan book would be around Rs 35,000-40,000 crore. “Our market share is eight per cent, which will be increased to 11 per cent in 2009-10.”
To support the target, the company was planning to raise Rs 15,000 crore, of which Rs 6,000 crore has been raised. It will mobilise the remaining money through non-convertible debentures and term loans, and would also place 10 million equity shares or 11 per cent of total capital; the company will do so through a Qualified Institutional Placement by the next quarter.
Nair said LHFL’s current net worth is Rs 2,500 crore. It has 10,000 agents with 158 marketing offices.
He said LIC HFL Care Homes, a company incorporated to provide community dwelling units to benefit the aged as part of a social responsibility initiative, has acquired seven acres of land each in Bhubaneswar and in Jaipur to set up Care Homes for elderly people.