Where Does Your Money Go After Buying an LIC Policy? Find Out Here
The Life Insurance Corporation of India (LIC), a household name from bustling cities to remote villages, holds a special place in the financial lives of Indians. Trusted by millions across income groups, LIC is not only the country’s largest insurer but also a significant player in the Indian stock market. But what does LIC actually do with your money after you purchase a policy? Let’s delve into how LIC strategically invests its funds to ensure profitable returns.
# LIC: A Key Investor in Indian Markets
LIC is the largest institutional investor in India’s stock market, allocating a substantial portion of policyholders’ funds to equities. This approach enables the insurer to reap profits while maintaining a diverse portfolio.
In the September quarter, LIC increased its stake in 75 of its 285 holdings and added seven new stocks.
It invested ₹56,000 crore, half of which went to large-cap stocks, resulting in net purchases worth ₹18,000 crore.
LIC’s total portfolio value grew to ₹16.76 lakh crore from ₹15.72 lakh crore in the previous quarter.
# Top Investments: Focus on Blue-Chip Companies
LIC strategically invests in blue-chip companies, reflecting its commitment to stable and high-performing stocks. Recent investments include:
- Larsen & Toubro (₹3,439 crore)
- Maruti Suzuki India (₹2,857 crore)
- Bajaj Finance Ltd (₹2,659 crore)
- IndusInd Bank (₹2,396 crore)
- Other prominent names: Mahindra & Mahindra, State Bank of India, Reliance Industries, and ICICI Bank.
# Key Reductions and Exits
While LIC expands its portfolio, it also trims investments where necessary:
- Sold shares worth ₹2,230 crore in NTPC and ₹2,129 crore in HDFC Asset Management.
- Fully exited from seven companies during the quarter.
# New Additions to LIC’s Portfolio
LIC’s recent acquisitions demonstrate its evolving investment strategy:
- Scient Ltd
- Shyam Metalics and Energy Ltd
- Sanofi Consumer Healthcare India
- Shriram Finance, IDFC First Bank, Bank of Maharashtra, and Bharat Electronics
When you buy an LIC policy, your funds are not just secured; they’re actively growing through strategic investments in India’s leading companies. By balancing blue-chip stocks, new opportunities, and calculated exits, LIC ensures consistent growth for its policyholders and the economy.