LIC to undertake realty projects across India

News Posted - 2010-03-07

LIC Housing Finance Plans Foray Into Banking Business

LIC Housing Finance, a subsidiary of Life Insurance Corporation of India (LIC), plans to apply for a banking license if it qualifies after the Reserve Bank of India (RBI) issues guidelines on issue of fresh licenses for private sector companies. Even if its parent company, LIC, is not able to partner the venture, the home loan company will go ahead with its plans of starting a bank if the company finds itself eligible under the proposed RBI guidelines.

“We are interested in applying for a banking licence. LIC may or may not be part of the venture because it is a public sector organisation and has its own regulations to follow. We have not initiated any talks with RBI. We are waiting for the guidelines from the central bank,” said R R Nair, director and chief executive officer of LIC Housing Finance, at a press conference called to announce the company’s fourth quarter results.

The company will also start operations of its real estate venture capital fund in the next six months with an initial seed capital of Rs 500 crore. “About 20 per cent of the capital will be from LIC and the housing finance company and the remaining would be mobilised from HNIs (high net worth individuals) and institutions,” said Nair.

The company had plans of roping in a joint venture partner for this, but decided against it. Now, it will be a subsidiary where LIC and the home finance company will be majority shareholders. It will invest in real estate projects in residential and commercial areas.

Financial Chronicle first reported that LIC and LIC Housing Finance will start a real estate fund with a corpus of Rs 500 crore. The company also plans to raise Rs 20,000 crore during the financial year through non-convertible debentures and public deposits.

The company has improved the share of its home loans from 6 per cent in 2008-09 to 12 per cent in 2009-10. The company has a special home loan rate of 8.9 per cent fixed for three years and a 8.75 per cent floating rate. For the year ended March 2010, the company approved Rs 18,043 crore of loans to individuals and real estate developers and disbursed Rs 14,853 crore.

Of this, home loans sanctioned was Rs 14,151 crore and disbursed amount was Rs 12,448 crore. The company reported a 36 per cent year-on-year rise in net profit to Rs 213.51 crore in 2009-10.
Source: http://www.indianrealtynews.com 29/4/10

KOLKATA: Life Insurance Corporation of India (LIC) would undertake realty projects, both commercial and residential, across the country.

Stating that LIC was the second largest real estate asset holder in the country after the Railways, besides being the largest investor, Chairman of LIC T S Vijayan said that LIC was looking at a real estate income of Rs 200 crore to Rs 300 crore.

He said LIC was at a premium income of Rs 1,76,000 crore during the current fiscal. To a query, he said that LIC was aiming at 18 per cent to 19 per cent growth in the next fiscal.

The insurer would be investing Rs 2 lakh crore in the current fiscal, out of which 15 per cent would be in infrastructure projects.

Laying the foundation stone of a residential housing complex in south Kolkata on Sunday, Finance Minister Pranab Mukherjee said that LIC was contributing to 4 per cent of the country's GDP as well as paying hefty dividends to the exchequer.

Source: ET 7/3/10