As reported by Mint, Life Insurance Corp. of India (LIC) has registered its highest ever profit of ₹25,908 crore from selling stocks in the eight months concluded on 30th November as the state-run insurer is set for India’s biggest initial public offering. The profit is a 66.3% jump from the ₹15,578 crore gains in the year-ago period and more than 80% of its full-year target of ₹32,000 crore which, if fulfilled, will be the insurer’s highest earnings from equity investments in its 64-year history.
The bumper gains have been aided by a resurgent stock market. The BSE’s benchmark Sensex paced up 56.4% since 1st April. Regulatory data reflected that LIC’s combined new business from individual and group single premium policies rallied up 22.4% to ₹95,840 crore in April-November. This, along with record profits from share sales, could increase interest in the LIC IPO.
According to Mint research, in the September quarter, the top 15 firms in which LIC cut stakes the most are ITC, NTPC, ICICI Bank, Nestle India, Britannia, ABB and Dr Reddy’s. LIC has sold shares amounting to ₹13,710 crore in these firms in April-September. LIC’s profits are primarily collected from the sale of shares in the insurer’s large, non-linked portfolio, which includes traditional life insurance policies.
“For fiscal 2021, our target for equity purchase is to cross ₹77,000 crore, depending on market conditions,” said the LIC spokesperson. Last fiscal, LIC purchased shares worth ₹61,590.02 crore. By 30 November, with four more months left in the fiscal, LIC had already bought shares worth ₹60,574.94 crore, 51% more than ₹40,098.83 crore in the same period last year.
“In the first few months after COVID-19 hit, sales were sluggish. Most LIC sales are generated via the agency channel, which has at least 1.2 million agents. The agents then pushed sales through online medium, and after June, premium income flow jumped. On an average basis, the new business premium is growing 10.5%, and renewal income is by 11% year-on-year in April-November,” said one of the three people cited earlier, all of whom spoke on condition of anonymity.