India’s largest insurer Life Insurance Corporation (LIC) plans to transfer 1.8 trillion Indian Rupees, a sixth of the 11.57 trillion rupees lying in its non-participating fund, to its shareholders’ fund, according to an official aware of the matter.
The state owned insurer listed on Indian stock exchanges in May, but its stock has since dropped by more than 35%, wiping off nearly 2.23 trillion Indian rupees in investor wealth.
LIC is now aiming to revive its share price according to sources. According to the report of some officials, transferring some of that into the shareholders’ fund is one way to shore up investor confidence as it would be an indicator of higher dividend payouts in the future.
The transfer would boost LIC’s net worth by about 18 times from its current value of about 105 billion rupees and top the net worth chart among insurers, including SBI Life and HDFC Life.