LIC saves government's divestment programme from disaster
New Delhi: Life Insurance Corporation of India (LIC) saved government's divestment programme from disaster by investing up to 11,000 crore in public sector companies last year. According to the finance ministry statistics, LIC accounts about 43 percent of the Rs 25,000 crore raised by the government from four share issues. To save the follow-on offers of NMDC and NTPC, LIC did major investments subscribing up to 63.72 percent and 49.48 percent, respectively .But both the companies did not perform very well . Although their retail participation did not double or triple the government still earned a profit of Rs 8,000 crore through NTPC, while NMDC offer earned Rs 9,925 crore. "Traditionally, LIC and public sector banks have been the back-ups in any large financial crisis. The point is that it was government's money which changed coffers, nothing else," said a senior analyst with a leading consultancy firm. The total investment by LIC so far this year is around Rs 20,311 crore. Compared to last year, the government has made huge profits through the public offers of companies such as Coal India to rise around Rs 21,000 crore. It is on course to raise the targeted Rs 40,000 crore this year, with issues of IOC and ONGC lined up in the coming months. LIC made an investment of Rs 1,496 crore in primary issues of private firms last year, although LIC invested around Rs 30,000 crore in the secondary market during the period, the market value of LIC's investments rise to 322,634 crore at the end of 2009-10 against a book value of Rs 189,653 crore.