DPIIT to seek nod on FDI for LIC IPO
DPIIT secretary Anurag Jain said that the department is at the last leg of inter-ministerial consultation on the matter and expected the Cabinet to take up the proposal soon
The department for promotion of industry and internal trade (DPIIT) will soon approach the Union Cabinet to seek its approval on changes in the foreign direct investment (FDI) policy to facilitate disinvestment of the Life Insurance Corporation (LIC) of India.
The department is in the last leg of inter-ministerial consultations on the matter and expects the cabinet to take up the proposal soon, DPIIT secretary Anurag Jain said.
“Hopefully, it should happen very soon. All the comments that will come (from different departments) will be supportive (of the proposal)," Jain said in the post budget media briefing on Wednesday.
The department will try to expedite the cabinet note as much as possible, the DPIIT secretary said.
The current FDI policy permits as much as 74% foreign investment under the automatic route in the insurance sector, but these rules do not apply to LIC, which is administered through a separate LIC Act.
Besides, according to the Securities and Exchange Board of India (Sebi), both foreign portfolio investment and FDI are permitted under the public offer.
However, as the LIC Act does not have the provision for foreign direct investments, there is a requirement to align LIC’s proposed initial public offering (IPO) with Sebi norms regarding foreign investor participation.
The Union Cabinet had in July last year approved the LIC IPO and the stake sale is being planned in the current March quarter. Union finance minister Nirmala Sitharaman has said that the disinvestment has to be completed in the current financial year.
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