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After raking in the moolah from sale of equity investments and aggressively investing in equity markets in the first nine months of the current financial year, LIC said it is hand-picking investments in the backdrop of volatility in the equity markets.
In the first nine months of the current financial year, India’s largest life insurer netted a much higher profit of ₹20,000 crore from the sale of equity investments against ₹16,000 crore in the year-ago period. Equity investments during the reporting nine months jumped to ₹70,000 crore against ₹49,000 crore in the year-ago period.
VK Sharma, Chairman, LIC, said the corporation sold more than it bought in the equity markets in January. He added that the corporation is now hand-picking its investments.
The volatility in the equity markets is underscored by the fact that the 30-stock benchmark BSE Sensex soared about 3,450 points between December 1, 2017 and peaked at 36,283 on January 29, 2018. Thereafter, the Sensex plunged 2,273 points.
LIC’s new business income was up 19 per cent year-on-year (y-o-y) to ₹99,850 crore in the first nine months of the current financial year against ₹83,610 crore in the year-ago period.
Premium income, including first premium income and renewal premium, was up 11 per cent y-o-y to ₹2,23,854 crore (₹2,00,818 crore a year ago).
“Our market share has improved over the year. Growth in new business premium is ahead of the industry,” said Sharma.
LIC to keep faith in PNB
Notwithstanding the recent disclosure by Punjab National Bank that offences of cheating and fraud aggregating about ₹11,300 crore were detected at one of its branches in Mumbai, LIC will keep faith in the state-owned bank by holding on to its shareholding.
After the government’s majority stake of 57.04 per cent, LIC was the second-biggest shareholder in PNB with 13.93 per cent stake as on December-end 2017. In fact, the shareholding of India’s largest life insurance firm in PNB went up from 12.52 per cent in the quarter ending September 2017.
“We are certainly going to hold on to the shares… We stand by PNB… It is a 133-year old bank. It has its own strengths,” said VK Sharma, Chairman, LIC.
Sharma observed that LIC’s equity exposure to the banking sector is 5-6 per cent of its total equity investments. He added that the insurer has more equity holding in private sector banks than public sector banks.
The life insurance behemoth has been an active participant in the QIP offers of PSBs.
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