Life Insurance Corporation of India (LIC) booked a record Rs 37,000 crore profit from share sales in 2020-21, the highest in its 65-year history, as the stock market reached record highs. The latest profit is a 44.4 per cent jump against its Rs 25,625 crore profit from stock sales in fiscal 2020.

During the fiscal year, India’s largest institutional investor purchased shares amounting to Rs 94,000 crore, also its highest ever. “We booked maximum profit by churning the equity portfolio, depending on available opportunities and also to maintain a long-term high-performing portfolio. The sale has been across sectors and driven by our focus on generating reasonable profits and available market opportunities,” managing director Mukesh Kumar Gupta said in an email reply to Mint.

India’s largest life insurer is also the largest investor in its markets, managing assets worth around Rs 34 trillion. It has been the government’s biggest financial backer, especially in its divestment programmes.

LIC’s profits primarily come from the sale of shares in its large, non-linked portfolio, which includes traditional life insurance policies.

The record profit increases LIC’s ability to pay better bonuses and returns to policyholders and better dividend to the government; expands LIC’s investible surplus which can support stock markets at uncertain times; and helps attract new customers due to its ability to generate such profits.

“The corporation’s investment strategy is to acquire and maintain quality assets… We also churn the portfolio to realize some profits and also switch some stocks. Our investment strategy aims to meet the reasonable expectations of policyholders along with the safety of the funds,” said Gupta.

The bumper gains have been partly helped by a resurgent stock market. “We take advantage of emerging market opportunities to enter and exit companies to generate profits as well as to create a strong equity portfolio to give reasonable returns over a long-term horizon,” Gupta said.