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LIC invests Rs59k more in equities, takes FY18 investments to Rs4.6 lakh cr

Insurance behemoth LIC has pumped about Rs59cr into equities in FY18. This has taken its total investments in equity to Rs4.6 lakh cr. Thus, its investments have risen up to 18% from a year ago. In FY17, the total investment was only Rs3.9 lakh cr.

Usually, the country’s largest life insurer typically invests Rs50,000-55,000cr in stocks every year. However, this year, on the back of bulls taking the lead on the stock markets, the insurer has reportedly exceeded its investment targets.

Incidentally, these investments were undertaken through policy-holder account. These investments by LIC make it certain that the policyholder gets some rate of return during policy maturity. Further, it also allows them to create an adequate corpus for claims settlement.

LIC has invested in pure equity, mutual funds, and government securities. Notably, since LIC is a long-term player with respect to insurance policies, LIC is mandated to invest at least 75% of its total investable assets in government securities.

So, why did LIC undertake such heavy investment? It basically follows a “contrarian” investment strategy, that is, selling when the market sentiment is bullish and buying when it is bearish.

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