LIC to invest Rs 3 trillion in markets this year: Chairman Surya Kumar Roy

This year's investment in equities would be one the highest

Life Insurance Corporation, which has nearly 13 lakh (1.3 million) customers in flood-ravaged Jammu & Kashmir, has said the financial impact of the massive tragedy would be "very minimal" on the company.

"Financial impact due to the massive floods in Kashmir this month will be very nominal for us. Even after the massive devastation caused by Uttarakhand landslides last year, the financial implication on us was very small, at under Rs 7 crore (Rs 70 million) from 435 claims, while in Kashmir the loss of lives is lower at less than 300," LIC Chairman Surya Kumar Roy told PTI during an interaction in Mumbai, without attributing a number to it, adding that so far no claims have been made.

Roy said that he is very bullish on the market and would invest Rs 3 trillion in markets this year, mostly in government securities, out of which Rs 55,000 crore (Rs 550 billion) would be in equities alone, adding that already the company has invested around 50 per cent of it in equities.

This year's investment in equities would be one the highest, since its Rs 61,000 crore (Rs 610 billion) investment in 2010, when Dalal Street had the best bull-run, he said.

LIC holds considerable stake in all top corporates like RIL, ITC, L&T, TCS, HDFC Bank, ICICI Bank and M&M among others, and its investment in these companies gained at least 45 per cent in the past one year, he said.

Its investment in L&T was worth Rs 11,923 crore (Rs 119.03 billion) last September, which is now worth more than double -- at Rs 24,877 crore (Rs 248.77 billion).

Similarly in ITC, in which LIC has the maximum stake by value at Rs 40,812 crore (Rs 408.12 billion) presently, used to be Rs 35,375 crore (Rs 353.75 billion) last September, he said.

LIC's investments in top 10 companies namely ITC, L&T, ONGC, SBI, RIL, ICICI Bank, TCS, NTPC, HDFC Bank and M&M are worth around Rs 4.12 trillion today, as against Rs 2.84 trillion last September, he said.

LIC has 30 crore customers and in July, its market share rose by 800 basis points to 75 per cent, the highest ever in recent years, he said. It has Rs 17.7 trillion (over $290.3 billion) of assets under management as of September, Roy said.

LIC in Kashmir

Roy said that LIC has 12.7 lakh policyholders in the flood-ravaged state, making it the largest player.

"With an insurance density of only 4 per cent, if we calculate loss of lives from the floods at 300, this works out to be merely 12 claims. Our assured sum in the state is Rs 16,435 crore (Rs 164.35 billion) as of last fiscal, out of our total 12.7 lakh policyholders," Roy said.

After the worst landslide in Uttarakhand last year, in which hundreds of people were killed, LIC received only 435 claims worth Rs 6.8 crore (assured sum), Roy said, adding that out these 435 claims, as many as 98 per cent were from outside the affected state.

Answering a question if the LIC would once again be forced to bail out massive disinvestment plans of the government beginning next week, Roy, who took charge on July 1, 2013, said that the impression about his company being forced to pick up stakes in government companies is baseless.

"Tell me, is there a single PSU, in which we lost money," he said, adding, "Most of the investments have given us good returns, to the tune of over 40 per cent and in some cases even more than double."

LIC's investments in ONGC, in which it allegedly was forced to bail out the divestment process in March 2012 at the last moment, is worth Rs 28,594 crore (Rs 285.94 billion) today as against Rs 17,916 crore (Rs 179.16 billion) a year ago, which is close to 60 per cent gains in a year, he said.

Its stake in SBI gained 92 per cent in a year at Rs 28,422 crore (Rs 284.22 billion) from Rs 14,833 crore (Rs 148.33 billion). Similarly, its stake in NTPC is worth Rs 10,011 crore (Rs 100.11 billion) now against Rs 9,432 crore (Rs 94.32 billion) a year ago, he said.