Life Insurance coverage Corp. of India (LIC) disclosed weakening financials and a surge in dangerous loans, hit by excessive publicity to confused sectors akin to actual property, the rising incapability of debtors to repay loans and downgrades of sure investments amid the Covid-19 pandemic.
This will likely pose a problem to the federal government’s plan to divest its stake within the insurer by way of a mega share sale.
The federal government is more likely to divest as much as 10% stake in LIC to satisfy its divestment goal and compensate for the widening fiscal deficit.
Based on the newest knowledge issued by LIC, the state-run insurer’s gross non-performing asset (NPA) ratio in its debt portfolio jumped to eight.17% on the finish of March 2020 from 6.15% in fiscal 2019. On a internet foundation, the NPA ratio has risen to 0.79% throughout fiscal 2020, from 0.27% throughout fiscal 2019.
LIC’s stability sheet grew to ₹31.24 lakh crore on the finish of fiscal 2020 from ₹30.56 lakh crore in March 2019. A more in-depth take a look at the newest financials confirmed LIC’s whole actual property publicity plus loans as a share of money and invested property rose to 4.22% in FY20 from 4.09% a 12 months earlier.