Life Insurance Corporation of India, the largest Indian institutional investor in the equity market, is likely to invest around Rs 2,000 crore (Rs 20 billion) in the stock market in the remaining three months of the current fiscal.

LIC is banking on good initial public offerings and government selloffs. This will be around 5 per cent of its portfolio valued at Rs 40,000 crore (Rs 400 billion).

The LIC managing director in charge of investments, R N Bharadwaj, said, "We are looking at opportunities from new IPOs that are likely to hit the market in three months."

Hinting on the divestment of Oil and Natural Gas Corporation and Gas Authority of India Ltd, by the government, which was likely to happen this fiscal itself he said, "We also intend to invest heavily in the government's divestment process as and when it happens."

LIC invests around 9 per cent of its incremental surplus accretion in the stock market. This year, LIC expects to generate around Rs 60,000 crore (Rs 600 billion) of investible surplus this year, 9 per cent of which will find its way into the equity market.

This was likely to be around Rs 4,500 crore (Rs 45 billion) for the year. It has already invested around Rs 2,500 cr (Rs 25 billion) in the previous months and the rest at Rs 2,000 crore (Rs 20 billion) is likely to be invested in the next three months.

The insurance behemoth had drawn up plans of stepping into the stock market in a big way and has been investing a few hundred crores every month.

"Although LIC has been a net seller in the last few weeks when the Sensex crossed 6000, we are on the watchout for big investment opportunity that might still come our way. We will also be investing in scrips where there are potential for future growth," explained Bharadwaj.

"There are opportunities at the current level for investment which is likely to provide hefty return in the long term," he added.

The insurance major, which has digressed from its past practice of buying and holding, has decided to reap 1 per cent of trading profits and managed to book profits that surpassed Rs 3,000 crore (Rs 30 billion) from the stock market as well as government securities.

Falling rate of interest and a bull run at the bourses has prompted LIC to aggressively trade in equities and book trading profits.