LIC's equity market investments slowdown

VK Sharma, Chairman of LIC, said, “This year in equity investments we are subdued and this was a deliberate decision as markets have gone up very high. We are a contrarian player in the market and our primary goal is to invest for long term and not play trader in the market.”

LIC's equity investment declined 38% to Rs 39,705 crore in 9MFY17, as compared to Rs 64,000 crore in 9MFY16. Photo: Official Website

India's Life Insurance Company (LIC) has taken a deliberate decision to go slow on its investments in equity markets this year, its chairman said on Monday.

VK Sharma, Chairman of LIC, said, “This year in equity investments we are subdued and this was a deliberate decision as markets have gone up very high. We are a contrarian player in the market and our primary goal is to invest for long term and not play trader in the market.”

During the nine month period (April – December 2016) of 2016-17, LIC's equity investment declined 38%, to Rs 39,705 crore as compared to Rs 64,000 crore invested in the corresponding period of the previous year.

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LIC has always been among the largest domestic investors in capital markets but the current investment would be its lowest in the last five years.

Investment in equities by LIC in previous fiscals were - Rs 40,000 crore in FY13, Rs 42,000 crore in FY14, Rs 45, 000 crore in FY15 and Rs 64,000 crore in FY16.

Last fiscal, LIC had also increased its exposure in 18 Sensex firms, including ICICI Bank, Axis Bank and Bharti Airtel in October-December period, with purchase of shares estimated to be over Rs 10,400 crore at current valuation.

In terms of debt investments, LIC has invested Rs 1.98 lakh crore in 9MFY17, under which Rs 1.83 lakh crore went into government securities and state development loans.

So far, LIC has equity investments of Rs 4.8 lakh crore and that investment in debt has been at Rs 17.35 lakh crore.

Meanwhile, in 9MFY17, LIC booked profits of Rs 16,000 crore, which saw a whopping increase of 68.42% versus Rs 9,500 crore in the same period of FY 16.

LIC also earned a total premium income of Rs 1.45 lakh crore, a rise of 12.40% from Rs 1.29 lakh crore a year ago same period.

Total assets increased by 12.81% to Rs 24.41 lakh crore as against Rs 21.64 crore in the previous year. Total income rose by 15.76 to Rs 3.37 lakh crore in 9MFY17, from Rs 2.91 lakh crore of 9MFY16, it said.

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