Cupboard offers nod for as much as 20% FDI in LIC beneath auto mode

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The cupboard accepted a proposal to permit as much as 20% overseas direct funding (FDI) in Life Insurance Corporation of India (LIC) by way of the automated route, a transfer that may facilitate the insurer’s upcoming initial public offer (IPO), stated individuals with data of the matter.

The present FDI coverage has additionally been “simplified and enhanced” to supply readability, one among them stated.

The nation’s largest 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 largest ever, is prone to be launched subsequent month. The pricing of the problem is but to be determined with some estimates pegging the provide dimension at about Rs 63,000 crore.

Sure modifications and alignments beneath numerous provisions of the FDI coverage have additionally been made to supply larger readability by way of 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 beneath the LIC Act, 1956.

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

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



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