State-owned Life Insurance Corp has invested at least $5.6 billion – at least Rs. 30,000 crore- in the equity markets in the current fiscal year which has witnessed depressed conditions. Very quietly, the behemoth rich in premium payments may have been bottom-fishing.
The corporation has been buying throughout the year, “We buy for the long term and if we get stocks at right price we will get good return on investments,” said Mohan Raj, executive director investments, LIC.
LIC recently increased its stake in GAIL and ICICI Bank to 9.98 and 9.38 per cent respectively. “It is purely a commercial decision based on the price of the stock and the prospect of the company,” said Raj.
LIC chairman T.S. Vijayan confirmed a figure of Rs. 30,000 crore, but market sources say the giant insurer is more likely to have snapped up shares worth about Rs. 40,000 crore.
Despite all the shopping, LIC is cagey on the market. “I don’t see a lot of positives in the market now and it will take some more time for revival. However, we are in for the long term,” said Raj.
Market experts are of the opinion that LIC’s investment has brought stability to the domestic market. “Whatever they have invested has helped absorb FII (foreign institutional investor) selling,” said Nirmal Jain, chief executive officer, India Infoline.
“Over the five years these investments over the past one year will generate positive return for them,” said Amitabh Chakraborty, president, equities, at Religare Enterprises.