Page 38 - Life Insurance Today May 2016
P. 38
Life Insurance
CorporationNews
LIC books Rs 11K cr Roads Ministry seeks soft loan from LIC for expressways
profit through equity in-
vestments in FY16 The road transport and highways min- The Finance minister had allocated Rs
istry plans to tap funds from the Life 55,000 crore as budgetary grant to
The Sensex declined by over 9 per Insurance Corporation of India, to un- the roads ministry. With the budget-
cent in 2015-16 still, Life Insurance dertake its ambitious expressways de- ary allocation, the roads ministry
Corporation has made a profit of Rs velopment programme. The roads would be able to construct only 7,000
11,000 crore through its equity in- ministry is likely to seek a
vestments in the recently con- loan of above Rs 50,000 kilometres of highways.
cluded fiscal. crore from LIC on soft terms, The remaining expansion
a senior transport ministry plans would have to be un-
"We saw some profit booking op- official said. dertaken through extra
portunities during budgetary support like loan
the fiscal and Road transport minister from LIC and public-private
made a profit of Nitin Gadkari has already partnerships.
Rs 11,000 crore given his nod for the plan
through our eq- and the proposal will soon be taken Jaijit Bhattacharya, partner
uity investments up with LIC and finance ministry. at KPMG, said, "All large scale infra-
in the recently "We'll seek similar conditions as LIC structure projects need low cost fi-
has offered to railways, such as the nancing to be viable. Raising loan
concluded FY16. In the past few loan to be given in tranches and the through LIC would reduce
years growth in equity investment interest rate to be kept around G- government's dependence on exche-
has been around 10-15 per cent, secs," the official said. quer. Road projects are positioned
which we can achieve even in this better to leverage from LIC loans."
financial year," executive director
for investment operations Pravin LIC subscribes approx Rs 7.34 crore shares from Vijaya
Kutumbe told reporters.
Bank
He said the largest domestic inves-
tor pumped in Rs 2.70 lakh crore Vijaya Bank received shareholders approval at a general meeting to rise up to Rs.
across equity and debt markets in 226 crore through preferential issue of shares to Life Insurance Corporation of India.
the fiscal, of which Rs 65,000 crore LIC has subscribed to around 7.34 crore shares of the bank at an issue price of Rs.
was in the equity segment. 30.75 per share aggregating to Rs. 226 crore. Subsequent to the preferential is-
sue, LIC's stake in Vijaya Bank has increased to 14.50 per cent from 7.19 per cent,
The depressed markets towards while the Centre's has reduced to 68.23 per cent from 74.06 per cent.
the latter part of the year led to the
corporation exceeding on its equity Allahabad Bank to raise Rs 57 cr via pref issue to LIC
investments target of Rs 60,000
crore announced earlier, he said. Allahabad Bank will raise over Rs 57.51 crore by issuing shares on preferential
basis to LIC. The decision was taken at the bank's extraordinary general meet-
38 ing. "Life Insurance Corporation has agreed to subscribe up to 1.32 crore eq-
uity shares of the bank on preferential basis at Rs 43.42 a share subject to 14.50
per cent cap of post-issue share capital," the bank said in the regulatory filing.
May 2016 Life Insurance Today
