The IPO of the country's largest insurance company LIC is expected to come in March. A big decision was taken regarding this IPO in the meeting chaired by PM Modi.
New Delhi: The cabinet on Saturday approved foreign direct investment (FDI) up to 20 percent automatically in LIC, which is preparing to bring an IPO. This move of the government will ease the disinvestment of the country's largest insurance company. The decision in this regard was taken in the cabinet meeting chaired by PM Modi.
IPO likely to be listed in March
The government has approved the listing of LIC's shares in the stock market through IPO. Foreign investors may also be willing to participate in this mega IPO, although there is no special provision for foreign investment in LIC under the extant FDI policy, which is a statutory corporation constituted under the LIC Act, 1956.
The investment limit in banks is also 20 percent.
But, at present, as per the FDI rule, the foreign investment limit in public sector banks under the government approval route is 20 percent. Therefore, it has been decided to allow foreign investment up to 20 percent in LIC and other such corporate bodies.
Draft was deposited with SEBI on 13 February
A source said that such FDI has been kept under an automatic system to expedite the process of raising capital. The cabinet had approved the IPO of LIC in July last year. LIC has also applied to market regulator SEBI for this issue.