Mumbai: LIC is likely to cross its initial investment target of Rs 40,000 crore in equities this fiscal following the positive market sentiment, Chairman of the largest domestic institutional investor S K Roy said today.
“We have done around Rs 32,000 crore in new equity purchases as of now... When Rs 40,000 crore of investment was fixed, it was based on certain things. But now things have changed. In the second half, if opportunities come, then Rs 40,000 crore will be not a limitation,” he said. “This year, obviously, opportunities are more than what was anticipated. So, in all likelihood, this figure is likely to cross...,” Roy told reporters on the sidelines of an insurance summit organised by industry body Ficci here.
LIC had cashed out from Infosys by selling shares worth Rs 3,400 crore in Q2, bringing down its stake to 4.95 per cent from 6.72 per cent in Q1. As on September 30, it fell to 4.95 per cent as per the latest data available with the stock exchanges.
Infosys scrip has moved in a wide range from about Rs 2,300 level to around Rs 3,300 in the past 10 months. Roy also said the life insurer will be able to achieve profit from investments at its targeted level this fiscal but declined to give any number.
“If the market is high, we will see how much we can sell for profit-booking. If the market dips, that gives us a buying opportunity. In that sense, we have got both opportunities in abundant measures this fiscal,” Roy said, adding that sectors like banking, pharma, some portion of infrastructure and auto look attractive for investment.
The insurance behemoth also maintained its bullishness on public sector banks saying it will invest if good opportunity comes up in this space.
“Public sector banks are very attractive investment opportunity for us and subject to regulatory issues, we look at state-run banking stocks with lot of interest. If an opportunity comes...like tier-I capital building opportunity, we will be definitely very happy to invest,” Roy said.
The Chairman also said the insurer is witnessing good opportunity in the debt space.
“There is an improvement in this segment also. We are getting good proposals which are under consideration. I am sure this segment will look up by the end of the year,” Roy said.
On the growth in premium witnessed by the company, Roy said the second quarter had seen excellent growth in premium collection and the current quarter would be a better one than the previous quarter.
“Q2 had been an outstanding quarter for us... July was a good month with decent growth. In August, we have seen outstanding growth. I am confident of achieving Rs 33,000 crore of new premium collection in this fiscal. Up to October 15, we have achieved Rs 15,000 crore. Q3 will be a better quarter than Q2,” Roy said.
LIC also said its products would be compliant with new product guidelines within the extended time frame provided by the regulator.
“I am confident that by the time the new product regime comes in, all our big grossing products will be on the table,” Roy said, adding that the new product regime would not have any adverse impact on growth of the industry.
Referring to board representations on companies in which LIC is holding significant stake, Roy said: “There may be some companies where we have significant stake but not having board representation. Since the beginning of this financial year, we have been engaging with those companies and are receiving encouraging response. We hope to get more board representations in the future.”
He also said that the life insurer plans to add 2 lakh more agents this fiscal to its present 12 lakh agency force and also looks at more tie-ups with banks. On the repository front, Roy said the strategy will be in place in the next few months.
