Mumbai: Life Insurance Corporation (LIC), a company known to assure people lifelong and even after death —"Zindagi ke saath bhi, zindagi ke baad bhi"— may be struggling to keep its own stature alive on account of the investment decisions of the corporation.
Policy holders might not feel so safe off late, particularly after Indiabulls Housing Finance Ltd (IHFL)’s 34.39% fall in the markets on Monday.
IHFL logged its worst-ever daily loss of Rs 133.95 or 34.39% to close at Rs 255.50, to hit lowest level in 5 years. This eroded about Rs 611 crore wealth of LIC policy holders in a single day.
LIC currently holds 45,827,373 shares or 10.78% of the total shares of Indiabulls Housing Finance. LIC, which held 5.19% stake in IHFL till August 2017, increased its shareholding in the company to 7.23% from 28 September to 13 November 2017, in the open market.
On February 10, 2018, LIC acquired an additional 2.11% stake in IHFL, in open market transaction taking the total shareholding to 9.33%.
IHFL informed the bourses after the market hours on Friday, 27 September 2019, that the public interest litigation (PIL) filed by Citizens Whistle Blower Forum came up for hearing before the Delhi High Court on Friday.
The Delhi High Court sought response of the Centre and the RBI on a plea seeking an SIT investigation into the alleged illegalities, siphoning of funds and violations committed by the promoters of IHFL.
The court listed the matter for further hearing on December 13, 2019 to allow respondent company to place on record relevant documents in support of its rebuttal to the allegations contained in the PIL.
According to media reports, about 80% of LIC’s equity portfolio was deep in the red at the beginning of September 2019.
By Dominic Rebello