With the stock markets witnessing a bull run, Life Insurance Corporation (LIC) has made a profit of Rs 19,000 crore by booking profits in some of its equity investments during the year ended March 2017, a 73 per cent rise from Rs 11,000 crore last year.
The equity portfolio of the LIC is around Rs 5,11,000 crore. “We invested around Rs 40,000 crore in the equity market last year. We are not a player in the equity market. We are long-term investors. Our total focus is on long-term investments… and we are contrarian investors traditionally,” LIC chairman VK Sharma said while launching its 100-year plan “Jeevan Umang”.
LIC equity investments were around Rs 65,000 crore in 2015-16, but this came down to Rs 40,000 crore last year.
On LIC’s investment in tobacco companies, Sharma said: “These are legacy investments. You have to appreciate that we have to protect the capital and the organisation. If we exit this highly productive investment, somebody will snap it up. So it is not a war between smokers and non-smokers or health versus disease. It is a commercial decision and so far this has made immense commercial sense. Also, only 45 per cent of ITC’s revenue comes from tobacco today.”
He said LIC’s investments in some firms including Axis Bank exceeded the 15 per cent limit of a single company exposure set by the regulator IRDAI.