Life Insurance Corporation of India (LIC) chairman G N Bajpai today hinted that the state-owned insurance behemoth would inject Rs 2,000 crore into the equity market in February and March.
Bajpai, who took part in an interactive session with the Indian Chamber of Commerce, said the corporation has decided to invest 8 per cent of its investable surplus of Rs 50,000 crore, amounting Rs 4,000 crore, in the equity market this financial year.
Bajpai said LIC had already invested Rs 2,000 crore so far in the equity market, with the balance investment corpus of Rs 2,000 crore to be invested in February and March.
This year's investment target of Rs 4,000 crore was 108 per cent higher than the previous year's investment corpus.
Last year, LIC invested 6 per cent of the investment surplus of Rs 32,000 crore, amounting Rs 1,920 crore.
In keeping with its tradition of investing aggressively in government securities, LIC this year would be putting in 60 per cent of its investable surplus amounting Rs 30,000 crore in the segment.
Bajpai said another 15 per cent would be in the infrastructure sector, 8-9 per cent in miscellaneous sectors and the balance in corporate debt.
He said LIC had made "good use of the recent volatility of the equity market and made some good investments".
In the process, it provided substantial support to the secondary market as a whole. "Had there been no LIC investment in the equity market, the Bombay Stock Exchange Sensex - the benchmark index of the country's capital market - would have touched the 2500-mark," he added.
Bajpai said there should be some changes in the legislation to turn the Indian debt market, a wholesale market in nature, more friendly to retail investors.
"In a developed country like the US, the debt market comprises two-third of the total capital market. In our country, equity market commands over two-third of the capital market, " he added.
