Country’s biggest insurer, Life Insurance Corporation, has refuted the allegation that it often steps in to bail out disinvestment offers. The company’s newly-appointed chairman SK Roy says the insurers take decision in the interest of its policyholders and may also get more actively involved with companies if required. He tells ET’s Dheeraj Tiwari that the insurer will invest . 40,000 crore in stock market this year. Edited excerpts:

In the current scenario, where the growth has taken a hit and the markets are choppy, what will be your investment strategy?

For us, it is never a bad time. If the sensex is doing well, we will use that opportunity to book some profits. If it’s not doing well, then it is an opportunity for me to enter into investments. From the investment point of view, the perspective will be 15-year plus. What happens in two or six months is a not a significant impacting event. We are very bullish on the economy, and we are certain this will turn out to be a very good India story. If the markets are rising, we will like to book profits wherever possible.

What’s your investment target? How much of it will go into equities?

Investments will be in the range of . 2.25 lakh crores. If all goes well, we may invest something around . 40,000 crore in equities. Over the last one month, the market was not good in the conventional sense. So it gave us a good opportunity to buy. We have done . 14,000 crore in the first quarter of this fiscal. Why is LIC salvaging government’s divestment agenda? I believe that this word salvaging OFS (offer for sale) is not correct. Investment decision is taken after a series of due diligence which is made at various levels. If we find value in an offer for sale, we participate. We do not come in the last to salvage it. We have participated in the OFS at different times of the day and this can be corroborated with the OFS of Hindustan Copper which has been oversubscribed 118%,which means if LIC was to salvage it then it should have been subscribed only 100%.

Are you seeking relaxations in the investment norms for LIC?

There are two options available. First, I look at slightly lower rated options or I can request the regulator to give me some flexibility by relaxing norms. That is something we are pursuing. Between the two options, I would prefer the second option because as a longterm investor, safety of funds is very important for me and that is one thing on which we will never compromise.

There is some confusion on how much LIC can invest in equity of a company. Is it 15% as per IRDA rules or 30% according to government?

As a compliant company, we will not like to be violating anybody’s guidelines. But there is an issue. The two sets of guidelines prescribe two limits. I believe that sooner than later this issue will be resolved. There are historical investment where we have exceeded the limit. But we have not acquired anything recently. We are compliant with both.

Finance ministry wants LIC to play more proactive role in board rooms...

I agree LIC should play an effective role in the governance. (But) My first task is to ensure that I get good returns on my investment. The government has not asked us to flex our muscles. It is as part of my strategy of investor protection where I am the investor. How well I am able to protect my interest in the company where I have substantial stake, either through my nominated director or through the normal channels of corporate governance. It is not anything other than primarily for investor protection. Now if I am holding a substantial stake in the company, prudence demands that I must ensure that my interests are constantly protected. Since I am a significant stakeholder, the company should at all times be a compliant company with all the regulations. If it requires greater participation in boards or any other changes we will work on that.

LIC Housing Finance has applied for a banking licence...

Our mandate does not permit us to do banking. LIC Housing finance is a board run company. If the board of the company has considered and come to a conclusion that banking will be good for the company then that’s a call that the board of that company has taken.

Are you prepared to be under the scrutiny of both RBI and IRDA in that case?

Obviously it will involve some cross sectional regulatory issues. NOHFC will have to be created by LIC Housing Finance because it is the applicant. During the process of the assessment of the application filed by LIC Housing Finance Ltd. if the RBI raises some questions which are directed towards LIC then we will necessary have to take a call on those questions. At this moment I will not like to go that far. We are supportive of LIC HF decision.

There is a view that LIC should follow stricter routine than investing merely on basis of ratings?

LIC is not taking investment decisions only based on the ratings. We have a research department. The proposal itself goes through various stages of due diligence. We are within comfort levels on NPAs. This reflects upon our assessment system. Our net NPA are at 1.18% and we will like to bring them down below 1% level. We have decided to see what further improvements we can make to be up to date and relevant.

on Investment Plan

For us it is never a bad time. If the Sensex is doing well, we will use that opportunity to book some profits. If it’s not doing well, it is an opportunity for me to enter into investments

on Governance

My first task is to ensure that I get good returns on my investment...The government has not asked us to flex our muscles. It is as part of my strategy of investor protection where I am the investor

on Banking

Our mandate does not permit us to do banking...If the board (LIC Housing finance) has come to a conclusion that banking will be good for the company, then that’s a call that the board has taken