Life Insurance Corp of India (LIC) is planning to transfer nearly $22 billion from policy holders' funds into a fund earmarked to pay dividends or issue bonus shares, two sources said on Friday, as the country's largest insurer aims to shore up both its own net worth and investor confidence, reports Reuters.
The state-owned insurer listed on Indian stock exchanges in May, but its stock has since dropped by more than 35 per cent, wiping off nearly 2.23 trillion Indian rupees in investor wealth.
LIC is now looking to looking at steps to revive its share price, said a government official, who did not want to be named.
The company plans to transfer 1.8 trillion Indian rupees ($21.83 billion), a sixth of the 11.57 trillion rupees lying in its non-participating fund, to its shareholders' fund, according to an official aware of the matter.
Life insurance companies primarily sell two types of products: the first are 'participating policies' where profits are shared with customers and second are 'non-participating,' or 'non-par,' policies that have fixed returns.
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