Life Insurance Corporation of India (LIC), the country’s largest financial institution with a corpus of over Rs 31 lakh crore, has booked a profit of over Rs 14,000 crore from the stock market during the April 1-November 15 period of the current financial year.
The 30-share Sensex had gained 1,985 points, or 3.82 per cent, during the period under review, enabling the corporation to post good returns. The market value of LIC’s investment as of end-FY19 stood at around Rs 28.7 lakh crore, growing 8.6 per cent on a year-on-year basis.
FY19 assets nearly a fifth of total stock market value
Though LIC has invested in some high-priced PSU IPOs and played a big role in the government’s disinvestment programme, the market value of the state-owned insurer’s investment as of end-FY19 stood at around Rs 28.7 lakh crore, growing 8.6 per cent on a year-on-year basis. LIC’s total assets hit an all-time high of Rs 31 crore in FY19, a 9.4 per cent rise. This is almost 20 per cent of India’s stock market capitalisation, which is at present Rs 154 lakh crore.
The insurer’s total assets had touched an all-time high of Rs 31 crore in FY19, an increase of 9.4 per cent. This is nearly 20 per cent of India’s stock market capitalisation, which currently stands at Rs 154 lakh crore. LIC — which started with an initial capital of Rs 5 crore in 1956 — began the 2019-20 fiscal year with an investible corpus of Rs 348,692 crore, that will be invested in capital market instruments like bonds, including government securities, corporate bonds and equities.
“We have earned a profit of above Rs 14,000 crore in the stock market this fiscal up to November 15, 2019 from Life Fund,” said TC Suseel Kumar, managing director, LIC. “The total investment in the stock market this year so far from the LIC’s Life Fund is over Rs 34,000 crore and the same was around Rs 31,000 crore last year,” he added. LIC is the largest stock market investor in the country.
“Our investment depends on the market movement. We sell normally when the market rises and buy when it falls,” the LIC MD further said.
LIC has seen a good growth in its business consisting of single premium, non-single premium, group pension business and investment income. “We haven’t seen any slowdown in our business,’’ Kumar said.
The corporation realised a lower profit of Rs 23,621 crore from its equity investment during 2018-19, down 7.89 per cent from Rs 25,646 crore in the previous year. It made Rs 19,302 crore profit in 2016-17, while the Sensex gained 4,279 points.
Currently, about 65 per cent of investments in Life Fund — total investment corpus accumulated over decades — of LIC are in central and state government long term securities with high interest coupons.
At a time when the Indian financial sector is facing a huge crisis due to rising non-performing assets in the banking sector and defaults in debt payments by India Inc, LIC’s growth in the investment income has risen by 5.17 per cent during 2018-19 as a result of regular follow-ups. Over the last four years, LIC’s investments income has increased from Rs 1.53 trillion to Rs 2.06 trillion up to 2018-19.
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