LIC Housing Finance Ventures into Real Estate Fund
LIC Housing Finance, the mortgage subsidiary of Life Insurance Corporation of India (LIC), is preparing to enter the venture capital landscape. The company aims to establish a Rs 500 crore real estate fund before the conclusion of the current financial year.
Partnership and Regulatory Approvals
LIC Housing Finance is actively searching for a banking partner to collaborate on raising capital for this venture. The company also plans to shortly approach the Securities and Exchange Board of India (SEBI) to establish an asset management company. Registering with SEBI is a typical procedure for companies looking to invest in publicly listed entities. The reception of this real estate fund will determine whether LIC Housing Finance expands its venture capital presence further. At least three prominent banks are currently under consideration for the partnership, and a memorandum of understanding is expected to be finalized in the near future. While LIC Housing Finance will be the primary promoter of the venture fund, LIC itself could also contribute internally.
LIC's Stance on Direct Venture Capital Involvement
LIC Managing Director Thomas Mathew clarified that the insurer does not intend to directly engage in private equity or venture capital activities.
Fund Utilization and Targeted Projects
The proposed fund from LIC Housing Finance will be dedicated to financing real estate development projects. Approximately 50 to 60 projects are anticipated to receive funding over a period of 12 to 18 months.
Increasing Participation in Venture Capital
The venture capital arena has recently observed a substantial influx of banks and financial companies, with established participants also broadening their involvement. "The insurer has no plans to directly enter the private equity or venture capital businesses."(Thomas Mathew, LIC Managing Director)