The largest insurer and domestic institutional investor of the country, Life Insurance Corporation (LIC) of India has decided to invest an incremental Rs. 2.4 lac crore in securities this fiscal year against about Rs. 2 lac crore in last fiscal year, an increment by 20%. Out of which, Rs. 45,000 crore is expected to be incremental in equities. The rest will be new investments in debt, and reinvestment of redeemed debt, dividends and profit from sale of equities. As of 31st March’ 2011, total investment in securities was about Rs 11.47 lac crore. “We are a long-term investor. We go by our own norms and do not interfere in their day-to-day working. In any case, we have our nominee directors in companies where we have a significant stake to take care of our interest. They have a clear mandate to protect our interest. Any decision that affects the interests of the organisation, we will definitely have a look at it. If it is a matter internal to them, we are okay with it”, said Mr. D. K. Mehrotra, Chairman of Life Insurance Corporation of India. “Further, our investment is based on the performance of the company vis-a-vis their competitors, market scenario, corporate governance, track record and future earnings. We normally do not get influenced by internal happenings”, he added. In reply to a question, Mr. Mehrotra dismissed all the market speculations that the Life Insurance Corporation of India is the protector of the share markets. “We do not save anybody or pull anybody down. It is a commercial decision. When the market comes down; we get a very good buying opportunity. We get very good scrips at a reasonable price, so we pick it up. And, when the market goes up, we have an opportunity to exit and book profits. We never see ourselves as a saviour when the markets tumble”, said Mr. Mehrotra. According to SEBI rules, one entity should not sponsor two fund houses. LIC was one of the promoters of erstwhile UTI (now UTI AMC). The insurer has also rejected itself from a board seat stating that it is interested only in investment.
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Thursday, October 11, 2012
LIC to invest Rs. 2.4 lac crore this fiscal year
The largest insurer and domestic institutional investor of the country, Life Insurance Corporation (LIC) of India has decided to invest an incremental Rs. 2.4 lac crore in securities this fiscal year against about Rs. 2 lac crore in last fiscal year, an increment by 20%. Out of which, Rs. 45,000 crore is expected to be incremental in equities. The rest will be new investments in debt, and reinvestment of redeemed debt, dividends and profit from sale of equities. As of 31st March’ 2011, total investment in securities was about Rs 11.47 lac crore. “We are a long-term investor. We go by our own norms and do not interfere in their day-to-day working. In any case, we have our nominee directors in companies where we have a significant stake to take care of our interest. They have a clear mandate to protect our interest. Any decision that affects the interests of the organisation, we will definitely have a look at it. If it is a matter internal to them, we are okay with it”, said Mr. D. K. Mehrotra, Chairman of Life Insurance Corporation of India. “Further, our investment is based on the performance of the company vis-a-vis their competitors, market scenario, corporate governance, track record and future earnings. We normally do not get influenced by internal happenings”, he added. In reply to a question, Mr. Mehrotra dismissed all the market speculations that the Life Insurance Corporation of India is the protector of the share markets. “We do not save anybody or pull anybody down. It is a commercial decision. When the market comes down; we get a very good buying opportunity. We get very good scrips at a reasonable price, so we pick it up. And, when the market goes up, we have an opportunity to exit and book profits. We never see ourselves as a saviour when the markets tumble”, said Mr. Mehrotra. According to SEBI rules, one entity should not sponsor two fund houses. LIC was one of the promoters of erstwhile UTI (now UTI AMC). The insurer has also rejected itself from a board seat stating that it is interested only in investment.
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