MUMBAI: Life Insurance coverage Corp, India’s largest purchaser of debt, has seen Rs 11,000 crore of bonds slide into defaults within the first half of FY20, with ranking corporations downgrading to junk the papers of DHFL, Reliance Capital, Reliance Dwelling Finance, and Sintex Industries.
LIC made provisions for its investments of Rs 6,500 crore in DHFL throughout life and pension funds, and these papers have been downgraded to default in June. Its publicity of Rs four,000 crore to Reliance Capital turned NPA for lenders in September 2019.
LIC had up to now taken publicity to many corporations dealing with insolvency proceedings. These included Alok Industries, ABG Shipyard, Amtek Auto, Mandhana Industries, Jaypee Infratech, Jyoti Constructions, Rainbow Papers, and Orchid Pharma.
The full debt e book of LIC was Rs four lakh crore: With belongings underneath administration of Rs 30 lakh crore, LIC is the biggest home institutional investor.
General, Rs 22,553 crore value of belongings have been downgraded throughout the September quarter, of which Rs four,300 crore was downgraded to sub funding grade or junk by ranking corporations. These included investments in Reliance Capital from pension and life funds.
LIC’s gross NPAs diminished to six.15 per cent in FY19 from 6.23 per cent. It made greater provisions for dangerous loans, resulting in a decline in its internet NPAs – to zero.27 per cent from 1.82 per cent. NPA as on March 31, 2019 was Rs 24,777 crore. It has publicity of Rs three,250 crore to Indiabulls Housing Finance, which was downgraded from AAA to AA+, publicity of Rs 1,500 crore to Piramal Capital and Housing, which was downgraded from AA+ to AA, and round Rs 6,000 crore in Sure Financial institution.
LIC has raised provision towards uncertain belongings by 25 per cent to Rs 25,000 crore for the final monetary 12 months after reviewing the standard and efficiency of investments in actual property, loans and different belongings. Over the previous few years, LIC has seen its exposures to careworn corporations, comparable to ABG Shipyard, Amtek Auto and Jaypee Group, flip dangerous. These debtors have been among the many first to be referred to the Nationwide Firm Legislation Tribunal (NCLT) underneath the Insolvency and Chapter Code.