Thursday, September 23, 2021
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Government considers allowing foreign direct investment in Life Insurance Corporation – Times of India

NEW DELHI: The federal government is contemplating permitting international direct funding (FDI) in Life Insurance Corporation (LIC), in keeping with an individual acquainted with the matter, which may allow a single abroad investor to purchase a big stake within the agency that’s headed for a mega-IPO.
Any strategic funding can be topic to a cap, although it’s unclear at what stage that will be set, the particular person stated, asking to not be recognized because the deliberations are personal.
Individuals at a gathering earlier this month famous a 20% FDI restrict on state-run banks, the particular person stated.
Permitting FDI in LIC would allow so-called strategic traders corresponding to large pension funds or insurance coverage corporations to take part within the preliminary public providing, which is slated to be India’s largest ever.
The Reserve Bank of India (RBI) defines FDI as buy of a stake that’s 10% or bigger by a person or entity primarily based overseas.
Bankers searching for to rearrange LIC’s IPO are on account of make shows to the federal government on Thursday.
Prime Minister Narendra Modi’s administration — which owns 100% of LIC — is trying on the sale to assist slim its finances hole to six.8% of gross home product within the 12 months by means of March 2022.
The itemizing may worth LIC at as a lot as $261 billion, primarily based on its property below administration and utilizing personal sector insurers as a benchmark, analysts at Jefferies India wrote in a February observe.
Whereas FDI of as a lot as 74% is permitted in most Indian insurers, the foundations don’t apply to LIC as a result of it’s a particular entity created by an act of parliament, the particular person stated, including that the discussions concerning FDI are at an early stage and no ultimate determination has been reached but.
A spokesperson for the finance ministry couldn’t be instantly reached for remark.
BNP Paribas SA, Citigroup Inc and Goldman Sachs Group Inc are amongst seven international banks vying to handle the IPO. 9 Indian corporations embody HDFC Financial institution Ltd and Axis Capital.



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