LIC to invest Rs 100 bn in equities in '05-06

Life Insurance Corporation (LIC) is to invest close to Rs 100 bn crore in equities this fiscal and another Rs 200 bn in government bonds in April-September.

Although falling bond prices may have affected profits of banks and FIs, LIC's equity portfolio has soared by 87.5% to Rs 600 bn till March end 2005 following the boom in equity market.

"We have so far invested Rs 320 bn in equities and mark to the market value has reached Rs 600 bn," LIC chairman R N Bhardwaj said, adding the insurer's equity exposure is 8-9% of its total investible funds, now at over Rs 4,000 bn.

LIC would maintain at least 8-9% of equity exposure amounting to close to Rs 100 bn this fiscal also, R N Bhardwaj said.

Bhardwaj indicated that LIC would be active investor in public offers coming up this fiscal.

LIC also expects to contribute up to 25% of Rs 800 bn market borrowing programme of the Union Government for the first half of this fiscal.

LIC is expecting over 20% growth in first premium income at about Rs 200 bn this fiscal, while its total premium income is likely to cross Rs 1,000 bn mark this fiscal.