LIC CEO Mohanty Says Firm To Finalise Acquisition Of Significant Stake In Health Insurance Company By March 31

While LIC was moving forward with the investment, CEO Siddhartha Mohanty clarified that the corporation would not be acquiring a controlling stake in the firm.

Alongside its health insurance plans, LIC also engaged in discussions with the Reserve Bank of India (RBI) regarding long-term bond issuances.

Source : Justdial

Life Insurance Corporation of India (LIC) MD and CEO, Siddhartha Mohanty, on Tuesday confirmed that the company is planning to reveal the details of its latest acquisition by the end of the current fiscal year.

The executive said the state-owned insurance player is looking to finalise the deal, in which it will acquire a major stake in a standalone health insurance company by the end of the 2024-25 fiscal year (FY25), reported Business Standard.

Although he did not reveal the name of the target company, Mohanty indicated that the process was in its final stages. “We have plans. Discussions are at the final stage. It is a natural choice for LIC to enter health insurance… Since regulatory approvals take time, I am hopeful that a decision will be taken within this financial year, before March 31,” he stated at the Global Conference of Actuaries in Mumbai.

While LIC was moving forward with the investment, Mohanty clarified that the corporation would not be acquiring a controlling stake in the firm.

Early in the first quarter of FY25, LIC announced its intent to enter the health insurance sector through a stake purchase in a standalone health insurer. At present, India has seven such companies: Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, Aditya Birla Health Insurance, ManipalCigna Health Insurance, Narayana Health Insurance, and Galaxy Health Insurance.

LIC Negotitating With RBI For Long-Term Bonds

Alongside its health insurance plans, LIC also engaged in discussions with the Reserve Bank of India (RBI) regarding long-term bond issuances. The corporation previously requested a 40-year bond, which received approval. Now, LIC is negotiating with the RBI for bonds with maturities of 50 and 100 years.

“We are long-term investors. We have contractual obligations to pay back as per the contract. So, I have to manage investments and asset-liability management properly… Western countries have long-term bonds,” Mohanty explained.

The RBI introduced 50-year bonds to address the increasing demand from insurance and pension funds, a move that aligned with LIC’s long-term investment strategy.