LIC IPO Update: There may be some changes on the issue of foreign investment in the country’s biggest IPO. The Union Cabinet may consider on Saturday a proposal to bring changes in the Foreign Direct Investment (FDI) policy to facilitate disinvestment in the country’s largest insurance company LIC.
The Department for Promotion of Industry and Internal Trade (DPIIT) has taken this proposal forward after consulting the Finance Ministry. A source close to the matter said, “The Union Cabinet will consider the proposal on Saturday.”
Foreign investment rule not applicable to LIC
According to the current FDI policy, 74 percent foreign investment is allowed in the insurance sector. However, this rule does not apply to Life Insurance Corporation of India (LIC). Its management is under a separate law LIC Act.
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As per the norms of market regulator SEBI, both FPI (Foreign Portfolio Investment) and FDI are allowed under public issue offerings. Since there is no provision for foreign investment in the LIC Act, there is a need to make the proposed LIC IPO as per SEBI norms with regard to foreign investor participation.
The cabinet had approved the IPO of LI in July last year. LIC has applied for this issue before the market regulator SEBI. LIC’s IPO will probably come in March.
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Investors taking interest in LIC IPO
Amidst the pressure in the stock market after the Ukraine crisis, the Finance Minister has dismissed the speculations of postponement of LIC IPO, saying that the IPO is in discussion in the market. Investors are also showing great interest in this. For this reason, the government is moving ahead with this issue. LIC’s IPO is going to be the biggest IPO of the country so far.
Till now more than 70 lakh people have updated PAN card
Till now 60-70 lakh policyholders of LIC have got their PAN card updated on its website. For the last two months, policyholders are rapidly updating their PAN card with the policy. In fact, those whose PAN cards are not updated in the policy will not be able to apply for shares under the reserve portion for policyholders. This is the reason why customers are updating fast.
Tags: IPO, LIC IPO, Life Insurance Corporation of India (LIC), Share market, IPO
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