Gilts corner chunk of LIC's first-half investment

Life Insurance Corporation of India (LIC) invested a total of Rs 40,000 crore in the first half of 2004-05, of which 55 per cent was accounted for by government securities.

About Rs 6,000 crore was invested in equities during the period, with net equity investments amounting to about Rs 3,000 crore, R N Bhardwaj, managing director, said.

Bhardwaj said LIC's investible funds have doubled in the last three to four years to about Rs 3,00,000 crore. The book value of investments by LIC is about Rs 3,30,000 crore.

LIC has also sanctioned lines of credit of Rs 9,000 crore to National Hydro Power Corporation and Rs 6,000 crore to the National Thermal Power Corporation. It has extended a loan of Rs 500 crore to Rural Finance Corporation.

LIC's premium income rose by 62.71 per cent to Rs 3,476.34 crore in the first six months of 2005 against Rs 2,136.57 crore in the corresponding period of 2003-04.

LIC's first premium income in the first half of 2004-05, amounted to Rs 3,500 crore with the number of policies issued rising by 26 per cent.

Bhardwaj said all factors point to firming of interest rates and the only thing that is holding back rise in rates is liquidity.