LIC Explores New Strategy to Unlock Value from Rs 60,000 Crore Realty Portfolio

Life Insurance Corporation of India (LIC), the country’s largest insurer, is exploring ways to improve returns from its extensive real estate portfolio, which is conservatively estimated to be worth over Rs 60,000 crore. As part of this strategy, the insurance giant is also considering the possibility of creating a separate subsidiary dedicated to managing its property assets more efficiently.

LIC Reviewing Vast Real Estate Holdings to Improve Returns

LIC CEO and Managing Director R Doraiswamy said the corporation has accumulated a substantial real estate portfolio over its nearly 70 years of operations. These properties include both inherited and acquired assets that are used for operational purposes as well as investment income generation.

"We have substantial real estate, both inherited and purchased over the period of 70 years that we have been operating. It is used both for our own use and as well as investment which earns returns for us.

"We look at each piece of real estate as an investment. As part of the asset, we expect each property to contribute towards the returns for the policyholders as well as shareholders," LIC CEO and MD R Doraiswamy told a news agency in an interview.

LIC Conducting Comprehensive Portfolio Review

Focus on Improving Yields and Profitability

Doraiswamy said Life Insurance Corporation of India (LIC) has recently initiated a detailed review of its real estate portfolio to assess current returns and identify opportunities for optimisation and higher revenue generation.

The review aims to strengthen profitability while ensuring better value creation for both policyholders and shareholders. Industry experts believe that effective monetisation and management of real estate assets could significantly enhance LIC’s long-term financial performance.

This detailed analysis is aimed at enhancing returns for policyholders while also strengthening the organisation's overall profitability, he said.

When asked whether LIC has set any specific targets for FY27, Doraiswamy clarified that the company’s immediate objective is to improve returns from current levels rather than achieve a fixed numerical target.

Asked if there is any target for FY27, Doraiswamy said, no such targets as such...we need to improve from whatever it is currently. That is what we are looking at.

Enhancing Property Value and Customer Experience

Self-Occupied Properties Also Under Focus

Apart from financial returns, LIC is also prioritising improvements in the appearance and infrastructure of self-occupied properties and branch offices.

"Properties that are self-occupied also play an important role in enhancing the organisation's image. Therefore, improving the ambience and overall environment of our branches and owned buildings has become a key focus area," he said.

LIC operates one of the largest branch networks in India, and upgrading office infrastructure is expected to improve customer experience as well as strengthen the insurer’s public image.

Review of Leased Properties

The insurer is simultaneously evaluating leased properties to ensure they generate appropriate rental income and better commercial returns.

"All options are open before us...all options will be examined and we will take it forward in the days to come," he said when asked if LIC would consider setting up a separate subsidiary for managing its real estate portfolio more efficiently.

At present, LIC’s immovable properties are managed by its estates department, while maintenance, construction, and engineering-related activities are handled by a separate engineering wing.

All these are part of our team and all of them are contributing for the returns of the organisation, he added.

Possibility of Separate Real Estate Subsidiary

Strategic Asset Management Under Consideration

Industry analysts believe that setting up a dedicated real estate subsidiary could help LIC streamline asset management, improve operational efficiency, and unlock greater value from commercial properties.

Several large financial institutions globally operate specialised real estate arms to manage leasing, redevelopment, monetisation, and infrastructure upgrades more professionally.

LIC’s massive property holdings include prime commercial assets in major Indian cities such as Mumbai, Delhi, Chennai, Kolkata, Bengaluru, and Hyderabad. Many of these assets are located in high-value urban business districts where property prices and rental demand continue to remain strong.

LIC Prepared for Further Government Stake Dilution

Government Yet to Decide Timing

When asked about future government stake dilution plans, Doraiswamy said LIC has remained prepared since its initial public offering (IPO) process.

"We have been prepared right from day one. When we started preparing for the IPO, we were prepared for this kind of subsequent actions as well. So the call is taken by the government."

He further stated that whenever the government decides on the timing and extent of additional stake dilution, LIC will fully support the initiative.

As and when a decision is taken on the timing and quantum of further stake dilution, LIC will be fully prepared to work closely with the government to ensure the initiative achieves the success it deserves.

Public Float Requirements

LIC launched its IPO in 2022, which was the largest public offering in India at the time. The government raised approximately Rs 21,000 crore by diluting a 3.5 per cent stake in the insurance giant.

Before the IPO, LIC was entirely owned by the Government of India.

Doraiswamy noted that the government remains focused on meeting stock market listing requirements, under which listed companies must maintain a minimum public shareholding of 10 per cent or 15 per cent over different phases and timelines.

The government is focused on achieving this goal, but due to current market volatility, it is waiting for the right time to launch the next public offering, he added.

LIC Rewards Shareholders Amid Strong Financial Performance

Bonus Issue and Dividend Growth

Since its stock market listing, LIC has undertaken several measures to reward shareholders.

Post-IPO, Doraiswamy said, LIC has done quite a good amount of activity in rewarding the shareholders.

In the last quarter, he said, LIC has announced a 1:1 bonus and then followed up with a good dividend which is 67 per cent more than what was declared in the previous year.

The LIC board, while finalising FY26 results, recommended a final dividend of Rs 10 per equity share of Rs 10 each, equivalent to Rs 20 per share on a pre-bonus issue basis, subject to shareholder approval.

Record Quarterly Profit

Last week, LIC reported a 23 per cent increase in net profit to Rs 23,420 crore in the March quarter, marking the highest quarterly profit posted by any financial services company in India.

Analysts believe LIC’s strong profitability, combined with improved asset management strategies, could further strengthen investor confidence in the company.

Conclusion

LIC’s move to reassess and optimise its massive real estate portfolio reflects the insurer’s broader strategy to improve operational efficiency and maximise long-term returns for policyholders and shareholders. With property assets estimated at over Rs 60,000 crore, the possibility of creating a dedicated real estate subsidiary could help unlock significant value from underutilised or strategically important assets.

At the same time, LIC’s strong financial performance, shareholder rewards, and readiness for future government stake dilution indicate the insurer’s growing focus on modernisation, profitability, and market competitiveness in India’s evolving financial sector