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LIC Unit To Set Up Venture Capital Firm

As part of a policy to start a new company every year

LIC Housing Finance (LHFL), an arm of Life Insurance Corporation (LIC) of India, has declared to launch a venture capital firm next month, The move is part of a policy to start a new company every year – reported Business Standard.

LHFL’s director and chief executive, R R Nair stated that the company wants to focus on fee-based and other income, as a result, it is launching a new company every year. He further stated they had launched a financial services company last year, the year before that, a mutual fund, and earlier, LIC HFL Care Homes.

The venture capital company will be launched in September, in a joint venture with a domestic firm, in which LHFL will be major share holder. Five prospective partners have been shortlisted. The size of the first fund is expected to be INR5 billion, said Mr. Nair.

LHFL had set a target to disburse INR130 billion in 2009-10, compared to INR87 billion last year, an increase of 40%. By the end of the current financial year, the company’s total loan book would be around INR350 – 400 billion.

The company was planning to raise INR150 billion, of which INR60 billion has been raised. It will mobilise the remaining money through non-convertible debentures and term loans, and would also place 10 million equity shares or 11% of total capital, through a Qualified Institutional Placement by the next quarter.