NEW DELHI: LIC aims to enhance returns from its real estate assets and may consider establishing a separate subsidiary to manage these efficiently. Its real estate portfolio is conservatively valued at over Rs 60,000 crore.
“Over the last 70 years, we have acquired substantial real estate, both inherited and purchased. We utilize these properties for company operations and as investments to generate returns,” said LIC CEO and MD R. Doraiswamy in an interview with PTI.
This recent review of LIC’s real estate portfolio is part of a broader strategy to evaluate returns and identify optimisation opportunities. Our goal is to bolster returns for policyholders while enhancing the organization’s profitability,” he added.
When asked about targets for FY27, Doraiswamy noted there are no specific goals, emphasizing the importance of improvement from current levels.
“Owned properties also enhance our company’s image, making it essential to improve the overall environment of our branches and buildings,” he explained.
LIC is also reviewing its leased properties to ensure they yield adequate returns. “We are exploring multiple options, including possibly forming a subsidiary for more effective real estate management,” he stated.
Currently, LIC’s immovable assets are managed by its estates department, while its engineering wing oversees maintenance and construction.
Regarding potential stake dilution by the Centre, Doraiswamy said, “We have been prepared since the IPO. The decision for future actions rests with the government.” As timing and extent of further dilution are determined, LIC will work closely with the government to ensure success.
LIC’s IPO last year was the largest in 2022, generating around Rs 21,000 crore through a 3.5% stake sale.
The government is focused on meeting listing requirements which mandate a public float of 10% or 15% for listed companies at various times. However, the current market volatility necessitates waiting for the right moment to launch the next public offering.
Post-IPO, LIC has actively rewarded shareholders, announcing a 1:1 bonus and a dividend increase of 67% compared to the previous year.
The board of LIC has approved a final dividend of Rs 10 per share (equivalent to Rs 20 per share prior to the bonus), pending shareholder approval.
In the last quarter, LIC recorded a 23% increase in net profit, reaching Rs 23,420 crore, the highest among financial firms in the country.
