Page 12 - The Insurance Times August 2022

LIC to invest Rs. 80.67 crore RCap was sent to bankruptcy court in In FY22, LIC's market share was 46 per
November last year after the company cent in APE terms. It stood at 49 per
in rights issue of its Nepal
defaulted on its loans to lenders, includ- cent in FY21 and 59 per cent in FY20.
arm ing Life Insurance Corporation of India
LIC has a high share of single premium
(LIC) and several other banks and provi-
LIC will invest Rs 80.67 crore in the pro- products due to its large group business.
dent funds.
posed rights issue of its joint venture In fact, single premiums constitute over
LIC (Nepal) Ltd. The RCap bonds are currently trading 70 per cent of its NBP. For private sec-
at a 70 per cent discount to the bond tor players, it is 20-30 per cent of their
The proposal was approved during the
amount and have already made a big NBP.
insurer's board meeting.
hole in investors' pockets. If LIC or any
Covid-related disruptions posed distri-
''Approval has been accorded for invest-
other investor has to sell their bonds in
ing in the proposed rights issue of LIC bution challenges for LIC initially, given
the market, then they will recover
(Nepal) Ltd worth NPR 127.07 cr (INR it has always been an agency-driven in-
around 30 per cent of their investment
80.67 Crore) approximately subject to stitution.
in the bonds.
the prevalent exchange rate for infus-
ing capital in LIC (Nepal) Ltd,'' it said. LIC gains 2% market share LIC valuation dips Rs.
in new business premium 40,000 cr on stock market
No takers for Rs. 3,400
LIC has gained over 200-basis points fall, rising rates
croreReliance Capital (bps) market share in new business pre- Life Insurance Corp. of India (LIC) has
bonds mium (NBP) during the April-June quar- suffered a Rs. 40,000 crore hit on its
ter of FY23.
LIC's plan to sell its exposure in bonds valuation due to the extended fall in
worth Rs 3,400 crore issued by Reliance According to IRDAI data, at the end of equity markets and rising interest rates
Capital (RCap) did not find any takers the June quarter, LIC's market share in affecting yields from its debt invest-
among asset reconstruction companies NBP stood at 65.42 per cent, compared ment, a top executive said.
to 63.25 per cent at the end of FY22.
(ARCs), as the deadline to submit ex- "The equity market fall has impacted
pressions of interest (EoIs) closed. However, its market share is still below the valuation of equity investment hold-
the FY21 and FY20 levels. In FY21, LIC's ings by LIC," an executive director of
Multiple sources said ARCs did not find
the option to buy bonds of the bank- NBP market share was 66 per cent, the country's largest life insurer said at
while in FY20, it was 69 per cent. a conference call hosted by chairman
rupt firm attractive and decided to give
M.R. Kumar.
it a miss. A source said IDBI Capital, NBP is the premium acquired from new
which has been mandated to sell the policies for a particular year.However, "The rising interest rate has impacted
bonds, will extend the deadline to July LIC does not enjoy a similar market the value of bonds, government securi-
22. The EoIs are to be followed by an share on an annualised premium equiva- ties and other fixed income papers.
auction to sell the bonds. lent (APE) basis. These have been factored in while cal-

12 The Insurance Times, August 2022