LIC focuses on new sector

It has come to the knowledge that the Indian insurance giant Life Insurance Corp of India (LIC) along with its associates will hold a majority stake in the real estate venture capital fund to be floated by LIC Housing Finance Ltd. Speaking on this LIC Housing Director and Chief Executive R.R. Nair said, “The majority stake will be with the LIC group. However, the actual percentage and other details as to the joint venture partner are yet to be decided.”

The venture capital fund’s initial corpus size is likely to be around Rs.500 crore, even though Nair said there will be more precision on the project Aug 29 when the board meets. He also said that the new company’s name will count on the partner selected for the venture.

What makes LIC op for this new initiative? As indicated by him, LIC Housing, which finances home purchases, observes floating a venture capital fund a natural extension of its business. “The real estate venture capital is a step towards widening our income basket. Currently, we get interest income from the housing company and fee-based income from the financial services outfit. The venture capital fund will provide income from shares,” Nair said.

The real estate fund will invest in companies operating in the field such as developers and construction companies. LIC is the second largest real estate owner in the country after the Indian Railways.

The Life Insurance Corporation of India (LIC) is the largest life insurance company in India and also the country’s largest investor; it is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government’s expenses. It has assets estimated of 5 Trillion Rupees. It was founded in 1956.

The Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India, at least 2048 branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches, and has a network of around 1.2 million agents [1] for soliciting life insurance business from the public.