LIC to Focus on Maximizing Returns from Vast Real Estate Holdings
MUMBAI: The Life Insurance Corporation of India (LIC) is set to implement strategic measures aimed at increasing the yield generated from its substantial real estate portfolio. Following a recent revaluation, these assets hold a book value of approximately Rs 16,000 crore, with their market value soaring to over Rs 45,000 crore.
Real Estate Yield Enhancement Takes Priority
Officials from the corporation have highlighted that while typical real estate investments yield around 3-4%, the potential for capital gains is significantly higher. In response, LIC is conducting a comprehensive review of its entire real estate portfolio to identify effective strategies for boosting income generation. The immediate focus is not on selling properties but on strengthening the revenue streams from these assets.
The insurer is also exploring innovative structures, including models similar to Real Estate Investment Trusts (Reits), to optimize returns. However, no final decisions have been made regarding such initiatives. This move aligns with broader governmental efforts, as highlighted by Finance Minister Nirmala Sitharaman in her Budget speech, which emphasized accelerating the recycling of real estate assets held by central public sector enterprises through dedicated Reits.
Health Insurance Plans Put on Hold
In a separate development, LIC has decided to delay its previously announced entry into the health insurance sector. Addressing the media after a board meeting, R Doraiswamy, MD & CEO of LIC, stated that the corporation is adopting a cautious approach. The initial plan, introduced by his predecessor, involved acquiring a strategic stake in a standalone health insurance company to gain market insights.
"While evaluating various options, we concluded that immediate entry is not necessary. Therefore, we are not proceeding rapidly with this initiative. We will reconsider the opportunity when a suitable prospect arises," Doraiswamy explained. This decision marks a shift in LIC's strategic priorities, focusing instead on core areas like real estate optimization.
Strong Financial Performance in Q3
For the quarter ended December 2025, LIC reported robust financial results. The corporation's standalone net profit surged by 17.2% to Rs 12,958 crore, compared to Rs 11,056 crore in the same period the previous year. Profit before tax also saw a significant increase of 16.7%, rising to Rs 12,897 crore from Rs 11,056 crore.
Net premium income demonstrated strong growth, climbing 17.5% to Rs 1,25,613 crore from Rs 1,06,891 crore. This growth was primarily driven by an uptick in new business and single premium products, underscoring LIC's solid market position and operational efficiency.
Future Strategic Decisions
Looking ahead, LIC has not yet finalized its stance on selling its stake in the National Stock Exchange (NSE), where it is a major shareholder, in the upcoming Initial Public Offering (IPO). This decision remains under consideration as the corporation continues to assess its investment portfolio and strategic objectives.
Overall, LIC's current strategy emphasizes maximizing returns from its real estate assets while temporarily stepping back from health insurance ventures, reflecting a focused approach to enhancing shareholder value and financial stability.
