LIC Of India makes a Profit of Minimum Rs 2000 Crores Post 16th May 2009

Please read the 8th June 2009 of BusinessWorld for the Full Article -How LIC Of India made a (min.)Rs 2000 Crores post 16th May 2009? :

"It is not unusual but in the many weeks leading up to the 18-19 May upsurge and beyond, the Life Insurance Corporation of India (LIC) has resorted to reshuffling a significant part of its investments in the equity market.

In May, till the 15th, domestic institutional investors (DII) had been net buyers on the exchanges to the tune of Rs 655 crore. Post the 19 May surge, and till 27 May, they turned net sellers to the tune of Rs 1,160 crore. In these two time periods, the foreign financial investors (FII) were net buyers each time — Rs 8,065 crore before the surge and Rs 3,688 crore afterwards. The biggest seller among DIIs was LIC.

A senior LIC official went on record saying the insurance company made a profit of over Rs 2,000 crore last year on equity investments.

LIC is undoubtedly the largest DII in equity markets. Its corpus is driven predominantly by the investment part of the insurance-cum-investment products it sells to millions of Indian individuals. The figures as on 31 March this year are revealing. LIC had stakes of 1 per cent and above in 393 listed companies that valued Rs 1,27,544 crore. On the same day, according to the Association of Mutual Funds of India, the collective assets under management of equity-oriented schemes of all domestic mutual funds were worth Rs 1,09,512 crore. The equity investments of LIC is greater than the entire mutual fund industry’s equity investments. Insurance companies, other than LIC, had equity greater-than-1 per cent-stake investments worth about Rs 18,000 crore of which ICICI Prudential Life Insurance Company made up for about Rs 8,300 crore.

It is difficult to tell what LIC is doing on a daily basis; all we can get to know is the quarterly greater-than-1 per cent shareholding information. This becomes even more complicated as LIC buys and sells shares on the stock exchanges through about 170 brokers.

“Till the end of second quarter of the previous year, the market estimate was that LIC had been a net buyer in equities to the tune of at least Rs 12,000 crore,” says Anita Gandhi, head of institutional business at Aryan Capital, an NSE broker. After that, the quarterly shareholding data as of September 2008 and March 2009 gets you a peep into the action.

From September 2008 to March this year, the Nifty fell by about 30 per cent from 4200 levels.

From September 2008 to March this year, the Nifty fell by about 30 per cent from 4200 levels to 2950 levels. The value of LIC’s greater-than-1 per cent-stake holdings in listed companies also fell, but by a lesser degree — by just 12 per cent from Rs 1,44,922 crore as on 30 September 2008 to Rs 1,27,544 crore as on 31 March 2009.

BW analysed the trend of change in LIC’s holdings during September 2007-March 2008 and September 2008-March 2009. The big-ticket changes, each time, tell an interesting story (see ‘Silent Strides’). In the latest period, LIC has bought additional stakes in many banking stocks and reduced significantly its stake in many traditional strong index stocks.

The new focus on banking stocks is revealing. “It could either mean that the LIC thinks Indian banks are undervalued or there is a quasi-government attempt to prepare for forthcoming potential new capital issuances from public sector banks due to a drastic fall in their capital adequacy ratios by the end of FY 2010,” says Saurabh Mukherjea, head of India equities at Noble Group.

The story will continue to unfold in the coming months. The elephant might not sit quietly.

(Businessworld Issue Dated 2-8 June 2009)"

LIC Of India will generate superior performance due to its innate good management practises and thus continue to garner more market share by cutting through the Market Share of all other Life Insurance Players. It is a really Unique Selling Proposition very hard to duplicate "HONESTY".That is why LIC Of India is the most TRUSTED BRAND for last so many years in INDIA.

The Bad Press, which was generated from 2000 because of so many interested segments now stands in stark contrast  to LIC OF INDIA's Performance Vs OTHERS IN A RECESSIONARY WORLD.WORK WINS YAKKING NEVER.It is the same CHINA - INDIA story with a difference.We work with honesty as a Company Policy.That is why nobody comes near our claims performance anywhere in the world!!!!