LIC eyes improvement in realty returns, considers separate unit

LIC is reviewing its vast real estate portfolio to improve returns and may explore a dedicated subsidiary for more efficient asset management

LIC is looking to improve returns from real estate properties, and the insurer would also explore the option of a separate subsidiary to achieve greater efficiency in managing its vast assets, which are conservatively estimated at over Rs 60,000 crore.

"We have substantial real estate, both inherited and purchased over the period of 70 years that we have been operating. It is used both for our own use and as well as investment which earns returns for us.

"We look at each piece of real estate as an investment. As part of the asset, we expect each property to contribute towards the returns for the policyholders as well as shareholders," LIC CEO and MD R Doraiswamy told PTI in an interview.

 

In the recent past, he said LIC has initiated a comprehensive review of its real estate portfolio to assess the returns and yields it generates, and to identify opportunities for further optimisation and improvement.

This detailed analysis is aimed at enhancing returns for policyholders while also strengthening the organisation's overall profitability, he said.

Asked if there is any target for FY27, Doraiswamy said, no such targets as such...we need to improve from whatever it is currently. That is what we are looking at.

"Properties that are self-occupied also play an important role in enhancing the organisation's image. Therefore, improving the ambience and overall environment of our branches and owned buildings has become a key focus area," he said.

At the same time, he said, LIC also evaluating leased properties to ensure they generate appropriate revenue returns.

"All options are open before us...all options will be examined and we will take it forward in the days to come," he said when asked if LIC would consider setting up a separate subsidiary for managing its real estate portfolio more efficiently.

At present, immoveable properties of LIC is being managed by the estates department while an engineering wing takes care of the maintenance, building and constructions.

All these are part of our team and all of them are contributing for the returns of the organisation, he added.

Asked if Life Insurance Corporation of India (LIC) is prepared for further dilution of stake by the Centre, Doraiswamy said, "We have been prepared right from day one. When we started preparing for the IPO, we were prepared for this kind of subsequent actions as well. So the call is taken by the government."  As and when a decision is taken on the timing and quantum of further stake dilution, LIC will be fully prepared to work closely with the government to ensure the initiative achieves the success it deserves.

LIC came with an initial public offering, the biggest till 2022 in terms of size, resulting in the government raising about Rs 21,000 crore by diluting just 3.5 per cent stake in the insurance behemoth.

Prior to 2022, LIC was wholly owned by the Government of India.

He further said the government has been focusing on complying with the listing requirements under which any listed company will have a public float of 10 per cent or 15 per cent at different schedules and times.

The government is focused on achieving this goal, but due to current market volatility, it is waiting for the right time to launch the next public offering, he added.

Post-IPO, Doraiswamy said, LIC has done quite a good amount of activity in rewarding the shareholders.

In the last quarter, he said, LIC has announced a 1:1 bonus and then followed up with a good dividend which is 67 per cent more than what was declared in the previous year.

The board of LIC while finalising FY26 numbers recommended a final dividend of Rs 10 per equity share of Rs 10 each (equivalent to Rs 20 per equity share pre-bonus issue basis) subject to approval of shareholders.

Last week, LIC posted a 23 per cent increase in net profit to Rs 23,420 crore in the March quarter, the highest by any financial services firm in the country.