LIC plans foray in fintech space, strategic investment also on table: CEO Doraiswamy
Insurance giant LIC is actively considering establishing a fintech arm either through strategic investment or organic way to cater to its growing digital needs, CEO and MD R Doraiswamy said.
“Naturally, to meet the modernisation requirement and particularly to bring innovation, we are engaging both fintech and insurtech players and we are getting a lot of new things being developed by such players,” Doraiswamy told PTI in an interview.
On the other side, he said, “we are a big financial institution investing in multiple organisations and we also look at strategic investments in any specialised player as a way of improving the returns on the policyholders’ funds.”
Talking about Life Insurance Corporation of India’s IT journey, he said, it was one of the early adopters of digital technologies. “We have built our own core competence in developing our business applications by building up a software development centre. We have sizable number of people working in our IT department creating the IT solutions for us but that does not mean that we can be totally self-dependent. We engage a lot of IT service providers for the new infrastructure and platforms,” he said. Doraiswamy, who had spearheaded the modernization of IT infrastructure and Business Applications of LIC’s Individual Business as Executive Director, said, the Corporation need to have both its own core development teams as well as the support of IT players.
“So, both go hand in hand...we are engaging the fintech players but whether it can be a strategic partner, we are looking at various options available and we may be coming up with something...our first aim is to modernize our IT applications and become as agile and nimble-footed as possible to remain relevant in the competition,” he said.
LIC is currently evaluating value proposition of various options on the table, he added. Asked if LIC is prepared for further dilution of stake by the Centre, Doraiswamy said, “We have been prepared right from day one. When we started preparing for the IPO, we were prepared for this kind of subsequent action as well. So the call is taken by the government.”
As and when a decision is taken on the timing and quantum of further stake dilution, LIC will be fully prepared to work closely with the government to ensure the initiative achieves the success it deserves.
LIC came with an initial public offering, the biggest till 2022 in terms of size, resulting in the government raising about Rs 21,000 crore by diluting just 3.5 per cent stake in the insurance behemoth.
Before 2022, LIC was wholly owned by the Government of India.
He further said the government has been focusing on complying with the listing requirements under which any listed company will have a public float of 10 per cent or 15 per cent at different schedules and times.
The government is focused on achieving this goal, but due to current market volatility, it is waiting for the right time to launch the next public offering, he added.
Post-IPO, Doraiswamy said, LIC has done quite a good amount of activity in rewarding the shareholders.
In the last quarter, he said, LIC announced a 1:1 bonus and then followed up with a good dividend, which is 67 per cent more than what was declared in the previous year.
The board of LIC, while finalising FY26 numbers, recommended a final dividend of Rs 10 per equity share of Rs 10 each (equivalent to Rs 20 per equity share pre-bonus issue basis), subject to approval of shareholders.
Earlier this month, LIC posted a 23 per cent increase in net profit to Rs 23,420 crore for the March quarter, the highest by any financial services firm in the country.
