By BS Reporter
Government-owned Life Insurance Corporation (LIC), the country’s largest institutional investor, says it’s not into the business of bailing out companies.
D K Mehrotra, LIC chairman, speaking on the sidelines of an event here, said: “We don’t bail out anybody; we only take commercial decisions.” This was in the context of reports about the government needing help to reach its year’s divestment target of Rs 30,000 crore, given the uncertain stock market.
Mehrotra said the government hadn't approached LIC on meeting its disinvestment target. Last year, LIC had helped in the recapitalisation of a slew of public sector banks, a big help to the lenders given the weak government finances. However, it made the Reserve Bank of India uncomfortable and it conveyed its displeasure to the banks’ boards.
LIC had also saved the face of the divestment department by subscribing to almost the entire Oil and Natural Gas Corporation issue, worth around Rs 12,000 crore.
Rashtriya Ispat Nigam Ltd’s Initial Public Offer, which was to hit the streets on October 15, was deferred for a third time this year on valuation differences. It was the first in a series of divestment measures the government had planned for this year.
Mehrotra said LIC planned to invest Rs 2.07 lakh crore in 2012-13 as against Rs 1.95 lakh crore last year. Equity investments would remain the same as last year, when it had invested about Rs 45,000 crore in these.
LIC, he said, would be betting on pharmaceuticals, information technology, fast moving consumer goods and banks. But it is not averse to investing in other sectors, too. ”We look into opportunities and, most importantly, the company’s performance,” Mehrotra said.
When asked about plans to increase the ceiling on investment in a single company, Mehrotra said, “We are discussing this with the ministry and the regulators, and something concrete should come up very soon. As of now, we haven’t heard anything from the regulator.”