Cashing in on the slump that has brought down valuations of various stocks to attractive levels, Life Insurance Corporation of India (LIC) has invested Rs 53,000 crore in domestic equity markets so far in 2015-16.
In the last financial year, the public sector insurance giant pumped in Rs 39,000 crore in stocks, chairman SK Roy said.
“Much of the year, capital markets have been down. This has given us an opportunity to be net buyers… We have been focusing on buying available stocks, and have crossed Rs 53,000 crore as far as our equity purchases are concerned,” he said on the sidelines of launching e-services for LIC’s policy holders.
LIC’s income on investments so far in 2015-16 is Rs 10,000 crore.
Since the end of March 2015, the benchmark BSE Sensex has declined 11.20%, as foreign institutional investors (FIIs) have pulled out their investments from India and other emerging markets. That has brought down valuations of several stocks, particularly in the large-cap space.
Many analysts say that this is a good time to buy equity as the pullout by FIIs is only due to the global uncertainties and slump in crude oil, while India’s fundamentals remain strong.
LIC has been “fairly active” in IT, pharmaceuticals and FMCG space, in the last two months, Roy added.
The insurance giant has also been picking up bonds of public sector banks, despite their rising non-performing assets, or bad loans.
“It (NPA issue) is something that the entire system is concerned about…We have been participating in bonds being issued by public sector banks to shore up their tier II capital after proper due diligence from our side. So, I don’t see any concern as far as that aspect of our investments are concerned,”said Roy.
Overall, LIC has crossed the Rs 150,000-crore investment mark in government securities (G-Secs) so far, Roy said.