The government expects to come out with the LIC IPO by the end of present fiscal.The government is mulling enabling foreign direct financial investment (FDI) in the country's biggest insurance provider LIC, a relocation which would help overseas financiers participate in the business's proposed mega IPO, sources said.
The proposal is under discussion between the Department of Financial Services and Department of Investment and Public Property Management (DIPAM).
Discussions have been going on for the proposition for the last couple of weeks.
It would likewise opt for inter-ministerial discussions and would likewise need Cabinet nod, a source stated.
According to the existing FDI policy, 74 percent foreign financial investment is allowed under the automatic route in the insurance coverage sector.
These guidelines do not apply to the Life Insurance Coverage Corporation of India (LIC), which is administered through a separate LIC Act.As per Sebi rules, both FPI and FDI are allowed under public deal.
Sources said because LIC Act has no arrangement for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms relating to foreign investor participation.
The Cabinet had in July approved the going public (IPO) of LIC.The DIPAM had in January appointed actuarial firm Milliman Advisors LLP India to evaluate the ingrained value of LIC ahead of the IPO, which is promoted to be the biggest public issue in Indian business history.The government anticipates to come out with the LIC IPO by the end of present financial.
Up to 10 per cent of the problem size would be reserved for policyholders.
The federal government has currently brought in the needed legislative changes in the LIC Act for the proposed IPO.Deloitte and SBI Caps have actually been selected as pre-IPO deal consultants.
As many as 16 merchant lenders remain in the race to manage the mega initial public offering.
These lenders will be making a discussion prior to DIPAM during the week.Seven worldwide lenders, consisting of BNP Paribas, Citigroup Global Markets India and DSP Merrill Lynch Ltd (now called BofA Securities), will make discussions.
The listing of LIC will be essential for the government to satisfy its disinvestment target.
The government aims to mop up Rs 1.75 lakh crore in the present financial from minority stake sales and privatisation.Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from offering the government's stakes in public sector banks and financial institutions.
The remaining Rs 75,000 crore would come as CPSE disinvestment invoices.