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India’s largest insurer, Life Insurance Corporation (LIC), held stocks worth a “carrying value” of Rs 9,79,843 crore (close to $130 billion), or 24.77 per cent of its total investments, as on September 30, 2021, making it the wealthiest investor in the stock markets.
LIC’s investments in listed equity represented approximately 4 per cent of the total market capitalisation of the NSE, says the IPO prospectus filed by the Corporation with Sebi. LIC holds sizeable stakes in most of the large- and mid-cap stocks listed on the stock exchanges. Carrying value, or book value, is the original cost as reflected in the balance sheet minus the depreciation.
The Corporation, which is going for an IPO, says profit on sale/ redemption of investments rose by 47.27 per cent from Rs 31,361.67 million in fiscal 2020 to Rs 46,186.75 crore in fiscal 2021 which was on account of realised profits on sale of equity. Over 90 per cent of the corporation’s policyholders’ equity investments on a standalone basis are held in stocks that are a part of the Nifty 200 and BSE 200 indices as on September 30, 2021, LIC said.
According to stock exchange data, LIC’s 6.13 per cent stake in Reliance Industries alone is worth around Rs 97,000 crore. It holds 12.16 per cent stake in Larsen & Toubro, which is worth around Rs 31,000 crore as per the current market valuation. LIC’s 16.21 per cent stake in ITC Ltd is worth over Rs 44,000 crore.
Out of the total investments of Rs 39.55 lakh crore, 37.45 per cent (Rs 14.81 lakh crore) is in Central govt securities, 24.62 per cent (Rs 973,800 crore) in state govt securities, 8.06 per cent (Rs 318,894 crore) in bonds and debentures and 3.07 per cent (Rs 121,297 crore) towards loans.
Among sectors that comprise over 5 per cent of the total investments, financial service activities, except insurance activities, account for Rs 1,26,476 crore, or 21.98 per cent of total investments, and infrastructure-related activities Rs 60,528 crore, or 10.52 per cent.
As of September 2021, LIC policyholders had total investments of Rs 39,49,516.37 crore on a standalone basis. This is more than 3.3 times higher than total assets under management (AUM) of all private life insurers in India and approximately 16.2 times more than the AUM of the second-largest player in the Indian life insurance industry in terms of AUM — SBI Life had the second largest AUM of approximately Rs 2.4 lakh crore — and is also 1.1 times the AUM of the entire mutual fund industry in India, which had AUM of around Rs 36.7 lakh crore as of September 2021.
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