LIC, ICICI Prudential invest Rs 13,000 crore (Rs 130 billion) and Rs 2,000 crore (Rs 20 billion) respectively in the first quarter of FY09.
Insurance companies have emerged as the big boys of Dalal Street with Life Insurance Corporation alone investing around Rs 13,000 crore in the first quarter of 2008-09.
The largest private insurer ICICI Prudential bought equity worth Rs 2,000 crore during the same period.
According to Sebi data, foreign institutional investors have sold Rs 14,000 crore (Rs 140 billion) in the first quarter this year.
There is no data on the equity investments of life insurance companies as a whole. But they have been the biggest buyers among the domestic institutions, according to company executives.
With insurance companies reporting sustained double-digit growth in new sales and unit-linked insurance plans holding their own, the investment from the segment continues to remain robust.
"We look at the long term economic growth prospects for India. We do not take long-term equity buying decisions based on short-term volatility," said ICICI Prudential Life Insurance Executive Director NS Kannan.
"We will confine (our purchases) to NSE's CNX-Nifty and junior Nifty," added an LIC executive.
LIC is expected to invest around Rs 60,000 crore (Rs 600 billion) in the stock markets this year compared to around Rs 42,000 crore (Rs 420 billion) in 2007-08. Its investible corpus is expected to climb up from last year's Rs 1,50,000 crore (Rs 1500 billion) to over Rs 1,75,000 crore (Rs 1750 billion) this year.
A Bajaj Allianz Life Insurance executive said the company is hoping to invest around Rs 2,000 crore (Rs 20 billion) in equities during the current financial year.
Max New York Life has invested around Rs 500 crore in equities so far this year and expects to invest a similar amount till December.
Max New York Life Managing Director & Chief Executive Officer Gary R Bennett said the bias in favour of equity was still strong.
"Currently, we are noticing a strange phenomenon. Our customers are increasingly switching from balanced options to equity, as the general expectation is that the market has bottomed out," added SBI Life Managing Director & CEO US Roy.
"A bear market cycle is a fantastic buying opportunity, subject to the right choice. In the first six months of this year, Ulips constituted 85 per cent of the products sold by us," Bennett told Business Standard.
