New Delhi: The Department for Promotion of Industry and Internal Trade (DPIIT) on Monday notified the government’s decision to allow foreign direct investment (FDI) up to 20 per cent in IPO-bound LIC with a view to facilitate disinvestment of the country’s largest insurer. did. ,
The Union Cabinet had last month approved the decision of FDI in the insurance sector.
The notification has inserted a clause in the existing policy allowing FDI up to 20 per cent in LIC through the automatic route.
Foreign investment in LIC will be guided by life insurance act1956 as amended from time to time and such provisions of the Insurance Act, 1938 states that the notification has divided other conditions into two parts – LIC and other insurance companies.
Since the foreign inflow limit for public sector banks under the government approval route is 20 per cent, as per the extant FDI policy, it has been decided to allow foreign investment up to 20 per cent for LIC and other such corporate bodies.
LIC being a statutory corporation, does not fall under an insurance company or intermediaries or insurance intermediaries, and no limit was prescribed for foreign investment in LIC under the LIC Act, 1956; Insurance Act, 1938; Rules made under the Insurance Regulatory and Development Authority Act, 1999 or related laws.
DPIIT Press Note 1 of 2022 states that the insurance company shall be permitted by way of total foreign investment in its equity shares by foreign investors including portfolio investors, total holding not exceeding 74 per cent of the paid-up equity capital.
In addition, the press note introduced the concept share-based employee benefits issued to non-resident employees or directors.
Issuance of stock options or sweat equity for share based employee benefits cannot be obtained by citizens of Bangladesh or Pakistan without the prior approval of the Government of India.
Setting the stage for the country’s largest ever public offering, life insurance corporation (LIC) on February 13 filed draft papers with capital markets regulator SEBI for sale of 5 per cent stake by the government for an estimated Rs 63,000 crore. SEBI had earlier approved the DRHP in February.
The initial public offering (IPO) of over 316 million shares or 5 per cent government stake was originally planned to launch in March, but the Russia-Ukraine crisis has derailed the plans as the stock markets are currently highly volatile.
Employees and policyholders of the insurance giant will get a discount on the floor price.
According to the draft Red Herring Prospectus (DRHP), the embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, has been pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman as of September 30, 2021. Advisor.
Though DRHP does not disclose the market valuation of LIC, it would be almost three times the embedded value or around Rs 16 lakh crore by industry standards.
LIC Public Issue will be the biggest IPO in the history of Indian stock market. Once listed, LIC’s market valuation will be at par with top companies like RIL and TCS.
So far, the amount raised from Paytm’s IPO in 2021 was the biggest ever at Rs 18,300 crore, followed by Coal India (2010) at around Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.
The Union Cabinet had last month approved the decision of FDI in the insurance sector.
The notification has inserted a clause in the existing policy allowing FDI up to 20 per cent in LIC through the automatic route.
Foreign investment in LIC will be guided by life insurance act1956 as amended from time to time and such provisions of the Insurance Act, 1938 states that the notification has divided other conditions into two parts – LIC and other insurance companies.
Since the foreign inflow limit for public sector banks under the government approval route is 20 per cent, as per the extant FDI policy, it has been decided to allow foreign investment up to 20 per cent for LIC and other such corporate bodies.
LIC being a statutory corporation, does not fall under an insurance company or intermediaries or insurance intermediaries, and no limit was prescribed for foreign investment in LIC under the LIC Act, 1956; Insurance Act, 1938; Rules made under the Insurance Regulatory and Development Authority Act, 1999 or related laws.
DPIIT Press Note 1 of 2022 states that the insurance company shall be permitted by way of total foreign investment in its equity shares by foreign investors including portfolio investors, total holding not exceeding 74 per cent of the paid-up equity capital.
In addition, the press note introduced the concept share-based employee benefits issued to non-resident employees or directors.
Issuance of stock options or sweat equity for share based employee benefits cannot be obtained by citizens of Bangladesh or Pakistan without the prior approval of the Government of India.
Setting the stage for the country’s largest ever public offering, life insurance corporation (LIC) on February 13 filed draft papers with capital markets regulator SEBI for sale of 5 per cent stake by the government for an estimated Rs 63,000 crore. SEBI had earlier approved the DRHP in February.
The initial public offering (IPO) of over 316 million shares or 5 per cent government stake was originally planned to launch in March, but the Russia-Ukraine crisis has derailed the plans as the stock markets are currently highly volatile.
Employees and policyholders of the insurance giant will get a discount on the floor price.
According to the draft Red Herring Prospectus (DRHP), the embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, has been pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman as of September 30, 2021. Advisor.
Though DRHP does not disclose the market valuation of LIC, it would be almost three times the embedded value or around Rs 16 lakh crore by industry standards.
LIC Public Issue will be the biggest IPO in the history of Indian stock market. Once listed, LIC’s market valuation will be at par with top companies like RIL and TCS.
So far, the amount raised from Paytm’s IPO in 2021 was the biggest ever at Rs 18,300 crore, followed by Coal India (2010) at around Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.