LIC ready to buy shares in govt divestment programme

State-run insurance behemoth LIC has invested Rs 45,000 crore in equity markets so far this fiscal and is ready to purchase more shares when government undertakes its divestment programme, Chairman S K Roy said today.

The life insurance giant has set a Rs 55,000 crore for equity market investments for the current fiscal 2014-15. This is, however, less than a record high of Rs 61,000 crore it had pumped into markets in 2010.

"We have already invested Rs 45,000 crore in the equity markets and we are ready to buy more if the government comes out with its divestment programme," Roy told reporters on the sidelines of the 16th Ficci insurance summit here.

LIC has a net investible surplus of Rs 2 lakh crore and its market exposure is over Rs 3 lakh crore including into government bonds which are worth Rs 2.4 lakh crore and expects this to touch Rs 2.5 lakh crore by March.

There have been reports that LIC, which has been known as the government's white knight during divestment programme, has been exiting some stocks to prepare war-chest for the divestment, through which the government has targeted to mop up Rs 43,425 crore.

LIC has stakes in 27 out of the 50 Nifty companies. It holds 17% stakes in L&T, 14% in SBI, 10% in Bhel, 7.79% in ONGC and over 3% each in TCS and HDFC.

About business growth, Roy said that LIC is expecting to collect 20% of the annual new business premium target of Rs 35,000 crore in the third quarter of the fiscal.

During the first quarter of the current fiscal, LIC had earned a total premium of Rs 14,016 crore, lower than Rs 14,295 crore in the year-ago period but still maintained its market dominance at over 82%.

"Our third quarter is panning out well. November is an outstanding month for us and we will be showing huge growth in new business premium. We are expecting to mop up 20% of the annual new business premium target Rs 35,000 crore in the current quarter," Roy said.

Last fiscal, LIC collected Rs 41,441 crore from individual premiums and Rs 48,682 crore in group premiums, aggregating to a total of Rs 90,124 crore when its market share stood at 75%.

Earlier, the company had said it was expecting to retain its existing market share at 82% during the current fiscal. LIC's market share increased to 82% last fiscal from 76%, a year earlier.

The life insurance sector with 24 players earned a total premium of Rs 19,699 crore in June quarter of this fiscal.