LIC is India’s biggest stock-market investor. Once listed, it might be tempted to increase its exposure to equities. We know what that did to India’s most popular mutual fund in the late 1990s. UTI’s US-64 collapsed because it had made too many risky investments. Most of 20 crore small investors never recovered investments
A few years ago, I was part of a jury to select the best businesses in India for a prestigious award. Other than me, everyone else was a luminary — some from industry and others from the world of business journalism. Also, other than me, everyone else believed privatisation of government companies was desirable and that markets should be allowed to function unfettered.
There was one notable exception to this unanimous belief in the virtue of private enterprise, and that was LIC (Life Insurance Corporation). India’s government-owned insurance giant was the hands-down winner in the life insurance category. Everyone agreed that only the LIC could be trusted to pay up when one finally kicked the bucket.
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