LIC Refutes Claims of Selling Land to Raise $7 Billion

Life Insurance Corporation of India is the country’s largest insurance company that sells life insurance policies. Based on the latest news, it is said that amid stiff competition from private competitors, LIC is planning to sell some of its prime properties. LIC owns several expensive properties in many major cities of India. These include plots and commercial buildings, with which, the company now plans to raise between 50,000-60,000 Crore rupees. The task of preparing the sale of these real estate assets has been assigned to an internal team. The sale could commence with the sale of some properties in Mumbai.

What properties could the bank sell?

LIC is the third largest landowner in the country. The bank possesses several plots and commercial buildings in prime locations of some major cities in India. These include the Life Insurance Jeevan Bharti Building in Connaught Place of Delhi, the LIC building on Chittranjan Avenue in Kolkata, and the Asiatic Society and Akbarally buildings in Mumbai. The last valuation of LIC’s real estate portfolio is estimated to be around around 6 to 7 billion dollars. The actual value could be much more than that.

The need for sale: 

In FY23-24, LIC reported a net profit of Rs. 40,670 Crore, up by Rs. 36,397 Crore in FY22-23. LIC had announced a dividend of Rs.6/- share for FY24 shareholders. Upon the sale of these properties, the company’s profits would soar resulting in better dividends for shareholders. However, upon confirmation, the insurer has discredited all news by stating that the media is incorrect on this issue. The bank has a market share of 58.8% in FY24. 

Conclusion: In both cases, the fact remains that the sale will come with several opportunities and challenges. To get the actual value of the property, LIC would have to conduct an auction which will lead to a change in the bank’s policies. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.