LIC hopeful of hike in equity investment cap

India's largest life insurer and a key investor in capital markets Life Insurance Corporation may soon get more headroom to invest in shares, said LIC chairman DK Mehrotra.

Mehrotra said the insurer has asked the government and the regulator to hike the present equity investment ceiling of 10% in a company to enable LIC to participate more aggressively in the equity markets. "Because of this ceiling, we are not able to participate aggressively in various stocks where we have already reached that limit," Mehrotra told reporters on the sidelines of an event on Friday.

"Hopefully something should come and we should get some headroom," he said. Mehrotra said that for 2012-13, LIC has a corpus of R2,40,000 crore to invest in capital markets compared with R2,00,000 crore in 2011-12. Out of this, the insurer has already invested around R70,000 crore so far, he said.

LIC has bought shares worth R7,000-8,000 crore so far in 2012-13, Mehrotra said.

LIC may look to buy SUUTI stake in Axis Bank, ITC and Larsen & Toubro, if approached by the government, Mehrotra said. The stake is valued around R37,000 crore.

The insurer is said to have already reached the investment ceiling in ITC and Larsen & Toubro.

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