The might of LIC

Not long back whenever one wanted to inquire if you’ve taken an insurance cover on your life, he would invariably ask, “Did you do LIC?” In those days the insurance sector was not opened for private participation, so therefore there was no choice for taking out a life insurance except from LIC.

Now the picture has changed. Lots of companies have come to with wide range of offers. Yet it would be fairly often that one still says, “Did you do LIC?”

Brand value is not the only strength of LIC. As events have proved, LIC has mustered an enormous financial muscle after insurance privatization. It is a very strong player on the bourses, and now it seems LIC is also becoming a big-time realtor.

In the recent keenly followed KMC (Kolkata Municipal Corporation) auction of the 5-acre plot opposite Science City on EM Bypass, LIC has emerged winner with a record price of Rs.276.2 crore, which translates to Rs.55.24 crore an acre.

This is a stupendous price considering that only a year back when the Emaar-MGF Group acquired a 6.24-acre property beside ITC Sonar Bangla at the rate of Rs.34.13 crore an acre, it was labeled an outlandish price.

According to reports there were 57 companies that bought the bid documents for this property. This included the famed biggies like Reliance and DLF. But as the D-day neared, 55 of them decided not to submit bid since they thought KMC’s floor price of Rs.275 crore was way too high.

Their gamble didn’t pay off since KMC decided to go ahead anyway, which is how LIC has landed the prized plot. The only other final contender was the Apeejay Surrendra Group’s Park Hotel but they were successfully outbid by the LIC.

What will LIC do with the prestigious acquisition? That unfolds in the next story.