LIC did not suffer from any major erosion in its equity portfolios. Instead, LIC actually booked profits to the extent of Rs 900 crore in equities trading.

Declining to detail the sectors where LIC would be investing in, Ramamurthy says: "LIC buys when the index is weak and sells at appropriate levels. About whether LIC will be part of the bailout consortium for the UTIs beleaguered fund, US 64, any such decision will have to be taken by the investment committee."

The insurance giant will also invest 60-to-65 per cent, against the stipulated 50 per cent, of its Life Fund in the government securities market, he says. "Life Fund has a corpus of Rs 2,25,000 crore. The fund appreciated to the current level from Rs 1,94,000 crore a year ago. Accordingly, investments in gilts are likely to be about Rs 13,500 crore during the current year."

LIC reported profits of Rs 300 crore last fiscal in trading government securities. LIC has departed from the convention of holding to securities till maturity and has been aggressively trading in the debt markets taking advantage of shifting yields, Ramamurthy says.