Screw stuck on foreign investment in LIC IPO, government will amend FDI policy

LIC IPO: The investors of the stock market are waiting for the Mega IPO of the country’s largest government insurance company LIC. But the road to LIC’s IPO is not looking so easy. There are still many obstacles and tricks in the way of LIC’s IPO. This screw is related to the Foreign Direct Investment (FDI) policy. This is the reason that to ease the way for LIC’s IPO, the central government is contemplating an amendment in the FDI policy to allow foreign investment in LIC and the world’s largest global funds in the IPO. be able to take part.

According to Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), the current FDI policy will not ease the disinvestment process of LIC, so it needs to be amended. He said that the government is working on easing the FDI policy. For this, the policy will have to be changed soon so that LIC can be disinvested. The government is bringing a revised FDI policy.

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where is the screw stuck
According to Anurag Jain, two rounds of discussion have already taken place and there is agreement on this in DPIIT, DFS (Department of Financial Services) and DIPAM. We are preparing the draft of necessary changes in the FDI policy, it will be sent to the cabinet for approval. On which the cabinet will take a decision.

According to the current FDI policy, 74 per cent foreign investment is allowed in the insurance sector under the automatic route. But this rule does not apply to LIC because its system is run by the LIC Act made by the Parliament. With the approval of FDI in LIC, global funds will be able to participate in its IPO and will also open the way for them to buy a significant stake after the listing.

Draft paper will be filed with SEBI
LIC may file Draft Red Herring Prospectus with the Securities and Exchange Board of India in the third week of January 2022 to bring its mega IPO. Top officials of LIC have indicated this during their meeting with global investors.

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Listing on Stock Exchange by March 2022
In any case, LIC wants to get its listing done on the stock exchange in March 2022 before the end of the 2021-22 financial year. It is believed that LIC’s IPO can be of size of Rs 1 lakh crore. This will be the biggest IPO in India’s capital market history.


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