Page 38 - Life Insurance Today December 2017

State-Run LIC may Partic- LIC books Rs. 13, 500 crore trading profit in April-Sep-

ipate In Bank Recapitali- tember period
Life Insurance Corp. of India (LIC), the 60% of all equity investments held by
sation Programme country's largest institutional investor, Indian life insurance companies. "Dur-

has booked a trading profit of at least ing the first half of the financial year
Rs. 13,500 crore from the sale of eq- 2017-18 LIC saw a healthy rise in pre-
uity holdings in the first half of the mium collections. During the last quar-
current financial year, as stocks scaled ter, the new business premium collec-
record highs. The figure marked a tions grew by at least 26%. The mar-
23.8% increase over the Rs. 10,900 ket has been rising, which enabled LIC
crore in trading profit that LIC earned to book more profits this time," said
in April-September 2016 through in- one of the two people cited above.
State-owned Life Insurance Corpora-
vestment redemptions,
tion may be roped in to participate The state-run insurer re-
two people with direct
in the Rs. 2.11 lakh crore recapitali- corded a 24% year-on-
knowledge of the
sation initiatives for public sector year rise in its first-year
insurer's investment premium income to Rs.
banks (PSBs). As part of the pro- earnings said. 68,224.29 crore during
gramme, LIC could also increase its
Since the start of the fi- April-September, ac-
stake in various PSBs which are re-
nancial year on 1 April, cording to Insurance
quired to raise Rs. 58,000 crore from
the BSE's benchmark Sensex index has Regulatory and Development Author-
the capital market, sources said. gained around 13.5% as investors ity of India (Irdai) data.Indian markets
Besides, they said, LIC could partic- shrugged off an unsettling transition to have been mostly bullish during the
ipate in a non operating holding the goods and service tax (GST) and a year so far. In fiscal 2017-18 so far, the
company (NOHC) structure to which delayed corporate earnings recovery, Sensex gained in 96 trading sessions
the government may transfer its choosing instead to bet on India's long- and fell in 66 sessions, giving LIC more
share in various PSHs. term growth potential.As households opportunities to book profits from eq-
shifted their savings into financial in- uity investments.
LIC in the past has pumped capital struments from traditional avenues
in PSBs through preference share such as real estate and gold, domestic "Most of the money made from profit-
booking will be invested by LIC into
allotment and Qualified Institutional mutual funds and insurance companies
the markets again. This will in turn im-
Placement (QIP). Earlier this year, pumped Rs. 61,559 crore into Indian
prove prospects of better returns on
Bank of India issued preference stocks during April-September. funds of policyholders in the long run.
share to LIC worth Rs. 451 crore. Data from stock exchanges showed In total, this financial year, LIC has an
that the value of LIC's holdings (in investible surplus of around Rs. 4 tril-
Similarly, UCO Bank, IDBI Bank,
companies where it held at least a 1% lion," added the first person. Apart
United Bank of India, Dena Bank and
stake) rose from Rs. 4.82 trillion in from equities, the life insurer has in-
Indian Overseas Bank also issued
March to Rs. 5.02 trillion at the end of vested at least Rs. 1 trillion in bonds
preference shares to LIC in the past September. That accounts for about so far during the financial year.
few years as part of their effort to
shore up their capital. LIC MF Interval Fund quarter interval plan to wind up
soon
Sources said that if there is LIC par-
ticipation in the government The Securities and Exchange Board of In-
recapitalisation initiative, it would dia made it mandatory for all open
ended debt oriented schemes to main-
be as per the regulatory investment
tain assets under management of mini-
ceiling fixed by the Insurance and
mum 20 crore rupees. The quarterly in-
Regulatory Development Authority
terval plan was wound up as it was not
of India (IRDAI).
able to maintain asset criteria.
38 December 2017 Life Insurance Today

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