LIC IPO: The Union Cabinet on Saturday allowed foreign direct investment (FDI) of up to 20 per cent under the automatic route in Life Insurance Corporation of India (LIC), which is about to launch its much-awaited initial public offering in a matter of days. News agency PTI Quoting sources. To facilitate the disinvestment process, LIC has been allowed up to 20 per cent FDO, the news agency reported.
The decision to allow 20 percent FDI in LIC was taken by the cabinet led by Prime Minister Narendra Modi. The Department for Promotion of Industry and Internal Trade (DPIIT) had proposed to allow FDI in LIC after taking a view from the Finance Ministry.
The LIC IPO was approved by the cabinet in July 2021, and stake sale is being planned for the current March quarter.
Current FDI Policy:
India’s current policy of 74 per cent FDI under the automatic route in the insurance sector does not apply to state-run insurance as it is administered through a separate LIC Act.
As per SEBI regulations, both FPI and FDI are allowed under public offering. However, since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI norms with regard to foreign investor participation.
LIC IPO on track: FM
The draft red herring prospectus (DRHP) of LIC IPO was filed with the Securities and Exchange Board of India (SEBI) earlier this month, with the government planning to sell 316.25 million shares or about 5 per cent stake in the life insurance giant . ,
Union Finance Minister Nirmala Sitharaman had said this week that the government would go ahead with LIC’s planned initial public offering (IPO), even as Russian army crowds near Ukraine’s borders put global markets in turmoil. gives. “There is buzz in the market and there is interest for LIC IPO. We are going ahead with it,” Sitharaman said at a press conference, adding that the government is equally concerned if market conditions are favourable.
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