Public sector insurer LIC on Tuesday strongly defended its investments in tobacco major ITC, saying a sale of its stakeholding would neither prevent people from taking up smoking nor help smokers kick the habit.

Announcing the company’s quarterly results on Tuesday, Chairman VK Sharma said that LIC is sensitive to protecting policyholders’ interests and giving them good returns in the long run.

If LIC were to sell its stake in ITC, other investors stood ready to pick it up, he said.

At Tuesday’s closing price, the value of LIC’s stake in ITC stood at ₹55,983.52 crore.

PIL against stakeholding

A group of petitioners had filed a public interest litigation (PIL) last month seeking to force State-owned enterprises to offload their stakes in ITC, India’s biggest cigarette maker.

The petition also included insurance regulator IRDAI and the Ministry of Health as respondents.

The petitioners include R Venkataramanan, Managing Trustee, Tata Trust; Pankaj Chaturvedi, Surgeon, Tata Memorial Hospital; BJP MLA from Maharashtra Ashish Deshmukh and Sumitra Hodda Pednekar (widow of Congress leader Satish Pednekar, who died of oral cancer in 2011).

LIC’s stake in ITC rose from 14.39 per cent as of March-end 2016 to 16.29 per cent as of March-end 2017.

In February, the Specified Undertaking of the Unit Trust of India (SUUTI), which is managed by an Administrator appointed by the Centre, lowered its stake in ITC from 11.12 per cent to 9.10 per cent, with LIC picking up the stake for about ₹6,700 crore via block deals.

Other PSU insurers have also pared their stakes in ITC.

Chaturvedi, one of the petitioners, said divestment of the ITC stakeholding by LIC and other state-run insurers would definitely enable the Government to take serious steps in implementing the WHO tobacco control convention, which India has ratified.