Life Insurance Corporation of India (LIC), the country’s largest insurer, is gearing up to raise between $6-7 billion through the sale of its prime real estate assets, according to a report by Livemint. This strategic move aims to monetize its extensive property holdings across India, starting potentially with assets in Mumbai.
LIC has initiated an internal team to formulate a comprehensive plan for the sale of its real estate portfolio, which includes some of the most coveted properties such as the Jeevan Bharti building in Delhi’s Connaught Place, the LIC building in Kolkata’s Chittaranjan Avenue, and properties housing notable institutions like the Asiatic Society and Akbarally’s in Mumbai.
The asset monetization strategy comes amidst LIC’s efforts to bolster its financial position and defend its market share against stiff competition from private insurers. The insurer, which commands a dominant 58.8 percent market share in first premium income as of FY24, aims to optimize its resources and streamline operations through this initiative.
An LIC executive mentioned that the actual value of these assets could be significantly higher than their current valuation, potentially up to five times greater, highlighting the substantial potential gains from the proposed sales.
However, Business Headline has not independently verified the details of the report.
Despite market challenges, LIC has maintained robust financial performance, reporting a 2.5 percent year-on-year increase in net profit to Rs 13,762 crore for the March quarter of FY23-24, compared to Rs 13,421 crore in the previous year. The insurer also announced an interim dividend of Rs 6 per share, underscoring its commitment to rewarding shareholders amidst a challenging economic environment.
LIC’s assets under management (AUM) expanded significantly to Rs 51.21 lakh crore as of March 2024, up from Rs 43.97 lakh crore in March 2023, marking a robust year-on-year growth of 16.48 percent. This growth reflects LIC’s ability to attract and manage substantial financial assets, further solidifying its position as a key player in India’s financial services sector.
Looking forward, LIC aims to expand its presence in Tier-2, Tier-3 cities, and rural areas, aiming to deepen market penetration and strengthen its competitive edge against private sector rivals. The company’s strategic initiatives and strong financial fundamentals position it favorably to navigate evolving market dynamics and capitalize on emerging growth opportunities.
As of 9:30 am, LIC’s stock was trading at Rs 1,072.75 on the National Stock Exchange (NSE), marking a modest 0.55 percent increase from the previous closing price. Investor sentiment remains cautiously optimistic, awaiting further developments on LIC’s asset monetization plans and their potential impact on the company’s financial outlook.
