New Delhi: India is considering a proposal for foreign investors to have as many as 20% in life insurance companies, according to someone with knowledge of this issue, which will enable them to participate in the national elderly public offering.
In the discussion is a plan to change the FDI rules so that investors can take pegs without government approval under the automatic route called, the person said, asking not to be identified as his personal deliberation.
Government officials will meet and discuss proposals at the beginning of Wednesday afternoon in New Delhi, said the person.
Ministry of Finance spokesman did not immediately respond to calls looking for comments.
Prime Minister Narendra Modi relies on money from the IPO insurance company managed by the government to meet the target of its budget deficit for the financial year until March 2022 as a collection of pandemic hit tax.
While 74% FDI was permitted in most Indian insurance companies, the rules did not apply to LIC because they were special entities made by parliamentary actions.
Reserve Bank of India defines FDI as a purchase of shares in registered companies that are 10% or greater by individuals or entities based abroad, or foreign investment in unregistered companies.
So permits for FDI in LIC not only allow global funds to participate in the IPO but also open the door to purchase significant stakes after listings.
The government is looking for assessments between 8 trillion rupees and 10 trillion rupees ($ 134 billion) for LIC, and are considering the sale of 5% -10%, which can increase between 400 billion rupees and 1 trillion rupees, Bloomberg has reported earlier.
Banks began to engage with investors last month, with a potential list expected between January and March in 2022.