The continuing rally in the markets has had the nation’s largest financial investor lIC booking a whopping 72 per cent more profit at Rs 19,000 crore from its equity play in FY17, even though its incremental investment into equities has been steadily falling.
In FY16, life Insurance Corporation (lIC), whose total investment stood at around Rs 23 trillion, had booked Rs 11,000 crore profit from the markets. Recent Sensex rally has helped it book 19 percent more profit in the March quarter alone. During the April-December period of 2016, it had netted Rs 16,000 crore in profit.
Chairman VK Sharma on Tuesday said the latest number is provisional, as it is yet to be approved by Parliament. Sharma was replying to query on how the Corporation can assure 8 per cent annual return on its new product Jeevan Umang that was launched today in a falling interest rate regime.
He defended the assured 8 per cent return on the new product saying on average it nets 7.5 per cent from huge exposure of around Rs 18 trillion in Government bonds alone. It can be noted that the Corporation made this stellar gain even as its equity investment, which stood at around Rs 5.11 trillion as of March 2017, have been steadily falling. It slumped to Rs 40,000 crore in FY17, from Rs 50,000 crore in FY16 and a high of Rs 65,000 crore in FY15.