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LIC plans VC foray
By agencies
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Monday, 18 July 2005, 19:30 IST
MUMBAI: Life Insurance Corporation (LIC) is planning to foray into the venture capital (VC) funding business. It will soon undertake a feasibility study, said AK Shukla, chairman, LIC.
There are risks involved in it. We may either do it directly or indirectly, said Shukla. LIC would study the pros and cons before taking a final decision, if the indirect route is adopted, LIC would try
to rope in an established player like ICICI Venture to manage its funds, he adds.
Shukla said, with a $23 billion kitty, LIC had big investment plans for the current year. Last year, we could not exhaust our quota of funds meant for the infrastructure sector as there were not many projects. This year, our exposure to infrastructure will be very large. We are now talking to various promoters for this, he said.
LICs gross investment was over $ 20 billion in 2004-05. From trading of equity and government securities, it booked a profit of $595 million and $274 million, respectively, in 2004-05.
LICs focus in investment has always been in high-yield instruments with an accent on security of funds.
The equity market has provided opportunities for booking capital gains through trading. Also, interest rates moving upward during 2004-05 have improved the yield, compared to the previous year, said a top LIC official.