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Life Insurance Corporation’s board on Monday approved capital infusion of ₹25 crore in LIC Mutual Fund Asset Management Ltd (LIC AMC) on a preferential basis.
LIC informed the stock exchanges of the investment decision on Monday.
Currently, LIC has 45 per cent stake in LIC AMC, followed by LIC Housing Finance at 39.30 per cent, GIC Housing Finance at 11.70 per cent and Union Bank of India at 4 per cent.
In July this year, LIC Mutual Fund completed the takeover of IDBI Mutual Fund and merged schemes with effect from July 29.
The strategic move was in line with its mission to strengthen and diversify its product offerings, expand its footprint, and grow its assets under management to emerge as a leading player.
LIC MF, which was launched in 1989, has AUM of ₹18,400 crore and IDBI MF ₹3,650 crore as of June 30. The Competition Commission of India (CCI) had approved the takeover of IDBI MF by LIC MF in March this year.
At the end of 2022-23, LICMF’s AUM stood at ₹17,600 crore. Equity accounted for around 45 per cent of the total AUM at close to ₹8,000 crore, while the remaining ₹9,600 crore came from debt schemes.
LIC MF’s market share stands at below 0.5 per cent of the industry’s total AUM. It had earlier this year indicated that it aims to take it up to one per cent in the next 5-10 years. LIC MF is eyeing an AUM of ₹27,000 crore by the end of this fiscal.
In May this year, LICMF had about 45,000 distributors, more than 50 per cent of whom are LIC agents.
GST notice
Meanwhile, in a separate filing with stock exchanges, LIC said it has received a Goods and Service Tax (GST) notice for ₹183 crore, which includes pending dues, penalty and interest, from the Telangana GST authority.
The “demand order-cum-penalty notice” pertains to fiscal year 2017-18, LIC said. It has been asked to pay ₹ 81.2 crore in the form of pending GST dues, along with a penalty of ₹93.2 crore and interest of ₹8.1 crore.
The GST notice has no material impact on the financials, operations or other activities of the corporation, it added.
The nature of violation is Excess Input Tax Credit claimed under Reverse Charge Mechanism and short payment under Reverse Charge Mechanism, according to the exchange filing.
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