Page 79 - Life Insurance Today July - December 2020

Act under which the state-run LIC was LIC keen to divest its stake year for the same period (April to Sep-
set up to prepare for the sale. tember) showing a growth of 30.37 per
in IDBI Bank: Report cent.

A stake sale in LIC is crucial for meet- The country's biggest institutional in-
ing a record Rs 2.1 lakh crore disinvest- vestor Life Insurance Corporation of LIC's investment in capital market and
ment target set for the current fiscal India (LIC) is keen to divest its stake in G-Secs this year has also grown com-
ending March 31, 2021. IDBI Bank reported quoting govern- pared to last year. In the current finan-
ment sources. cial year (up to September 30), LIC's
Pandey said only after the four stages total investments in G-Sec, SDL, cor-
converge, then a decision would be However, the report added that the porate bonds and equity was to the
taken on the quantum of government sale structuring is yet to be decided. tune of Rs. 2,63,845.98 crore as
stake to be diluted in LIC. Life Insurance Corporation had a 51 against Rs. 2,44,931.33 crore last year
per cent stake in the bank as of Sep- for the same period, implying a
"Then the IPO decision would be tember 30, while the government had growth of 7.7 per cent.
there, what percentage of IPO we will 47.11 per cent.
"In government securities and equities
go forward. Only after these four
things converge... we are trying our "LIC has received inter-ministerial we have found good investment oppor-
best to do this fiscal. But this IPO is a feedback on IDBI Bank stake sale. Min- tunities. In corporate bond investments
we are a bit cautious," said MR Kumar,
big issue and I think it will take time," isterial panel is yet to decide on the Chairman, LIC, is an exclusive interview.
Pandey said when asked if the offering structuring of IDBI Bank stake sale," He added that LIC plans to invest at
would happen this fiscal. the report said.
least a further Rs. 2 lakh crore, in the
remaining part of this fiscal.
Pandey said Deloitte and SBI Caps have The insurance behemoth will soon
been appointee pre-IPO advisors who seek broad in-principle cabinet nod for On its debt portfolio, LIC is not expect-
have been working with LIC to list out the stake sale in IDBI Bank. ing any major defaults, as it believes
the items of compliance. that with the economic activity gain-
Earlier in the day, the share price of ing momentum in the last two
the lender closed 2.61 per cent down
The second part is a legislative amend- months, corporate financials should
at Rs 33.60. On the other hand, the
ment that the Department of Finan- improve further.
BSE Sensex slipped 1,066 points, or
cial Services (DFS) is working along
with DIPAM, he said. 2.61 per cent, to 39728 tracking weak "LIC follows strict due diligences and
global cues. very few companies have taken mora-
This amendment would facilitate the torium, which is not even 2 per cent
initial public offering (IPO) of LIC, by LIC's equity investments of our corporate debt," adds Kumar.
Also, LIC's 8.25 per cent stake sale in
making changes in the LIC Act. ride high on market surge
UTI AMC (via IPO) should fetch the in-
Books profit of about Rs. 14,800 crore surer some tidy gains, this fiscal.
"Third, is the issue of internal changes on its investments in equities so far this
in LIC like software changes to come
fiscal. On the business front, the LIC chief is
out with embedded value. LIC has
confident of seeing steady growth for
been doing old-style actuarial India's largest life insurer, Life Insur- the rest of the fiscal and believes that
valuation. But for IPO they need to do ance Corporation, has raked in tidy its efforts to rebalance the overall port-
embedded value," he said. gains on its equity investments so far folio with equal focus on linked/ULIP
this fiscal, thanks to a sanguine capital products, can help mitigate reinvest-
He said DIPAM would come out with market. ment risk, amid the sharp fall in interest
an RFP to appoint an actuarial firm rates.
that will independently verify the ac- LIC has booked profits of Rs.14,857
tuarial value produced by LIC. crore as against Rs. 11,437 crore last To improve persistency ratios (number

Life Insurance Today July - December 2020 79