lic: Cabinet gives nod for up to 20% FDI in LIC under auto mode

The cupboard permitted a proposal to permit as much as 20% international direct funding (FDI) in Life Insurance coverage Company of India (LIC) via the automated route, a transfer that can facilitate the insurer’s upcoming preliminary public supply (IPO), mentioned folks with data of the matter.

The present FDI coverage has additionally been “simplified and enhanced” to supply readability, considered one of them mentioned.

The nation’s greatest life insurer had filed for the sale of a 5% stake by the federal government on February 13. The IPO, anticipated to be the nation’s greatest ever, is prone to be launched subsequent month. The pricing of the problem is but to be determined with some estimates pegging the supply dimension at about Rs 63,000 crore.

Sure adjustments and alignments underneath varied provisions of the FDI coverage have additionally been made to supply better readability via an up to date, constant and simply understandable framework for abroad funding in LIC. This was essential as the prevailing coverage does not have any particular provision for abroad funding in LIC, which is a statutory company established underneath the LIC Act, 1956.

“Since, as per the current FDI coverage, the international inflows ceiling for public sector banks is 20% underneath the federal government approval route, it has been determined to permit international funding of as much as 20% for LIC and such different company our bodies,” one other particular person mentioned.

Moreover, FDI in LIC and different such state-owned company entities has been saved within the automated route, as within the case of the remainder of the insurance coverage sector, to expedite the capital-raising course of by reducing down approval necessities. This implies prior approval of the Reserve Financial institution of India or the central authorities is just not required.