Life Insurance of India (LIC) is planning to scale
up its investment in public sector units (PSUs) as government has
instructed it to prepare for divestments. LIC has earmarked Rs 20,000
crore for upcoming PSU share sale, reports CNBC-TV18.
LIC, meanwhile, is targeting to invest Rs 50,000 crore in equities in FY13.
According to the Insurance Act, equity exposure in a single entity is
capped at 10%. LIC can invest up to 10% of the capital employed by the
investee company, or 10% of the fund size in a corporate entity,
whichever is lower. The capital employed includes share capital, free
reserves and debentures or bonds.
As on March 31, 2011, LIC’s investment corpus stood at nearly Rs 11 lakh
crore, of which 20% (Rs 2.2 lakh crore) was equity. Of that,
investments in state-run stocks stood at Rs 85,031 crore, while exposure
in banks stood at nearly Rs 59,586 crore.
