LIC to pump in Rs 10,000 cr in bourses by March-end

The country’s largest insurer LIC today said it would pump in about Rs 10,000 crore in the stock markets by March, taking its annual equity investment to Rs 60,000 crore this financial year.

“Our investment in the equity market so far has already crossed Rs 50,000 crore and we expect to close the fiscal (2009-10) with an investment of Rs 55,000-60,000 crore,” said LIC Executive Director (investment operations) N Mohanraj.

During 2008-09, LIC invested Rs 40,300 crore in the equity market, Mohanraj said. This fund infusion in the market by the country’s biggest domestic financial institution boosted the sentiments at bourses, which witnessed volatility, especially after the collapse of Lehman Brothers in America in 2008.

On further prodding about investments details, the company ED said, it is sector agnostic and spread across many companies. Besides, LIC is also participating in the primary market by investing in follow-on public offer by public sector companies.

LIC was among the largest investors in NTPC’s follow-on-public offer and going forward it would bet in other PSU public offers. The company would be aiming for a good portion of Rural Electrification Corporation’s offer, he said.

REC is looking at raising close to Rs 4,000 crore through a FPO this month. The company plans to sell 17.17 crore shares through the FPO, which will constitute 17.39 per cent of its fully diluted post-issue capital. The issue consists of a fresh issue of 12.87 crore equity shares and an offer for sale of 4.29 crore shares.

Asked about the cause for increasing exposure in the stock markets, Mohanraj said, the sentiment in the equity market was improved and slew of public offers were in the pipeline. Moreover, the investment was also linked to premium collection.