LIC IPO Centre won't need to change any law for foreign participation in LIC IPO
New Delhi/IBNS: No amendments will be necessary to any legislation to allow foreign participation in the proposed IPO of insurance giant Life Insurance Corporation of India (LIC), according to the media reports.
Foreign partcipation in the IPO will be according to the listing rules of the Securities and Exchange Board of India (SEBI) and the extant sectoral FDI guidelines , a report in the media said citing sources.
Foreign investment in the insurance sector has to also agree with the norms laid by the Insurance Act, IRDA Act, which are implemented by sector regulator IRDAI.
The initial public offering (IPO) of LIC would be also in accordance with IRDAI capital regulations.
The government can come out with amendments to relevant rules if any clarification would be required, stated the report.
In view of the proposed IPO of LIC, the Centre amended the Life Insurance Corporation Act, 1956, earlier this year.
The amendment will allow the government at least 75 percent in LIC to hold for the first five years after the IPO, and later hold at least 51 percent at all times after five years of the listing.
The authorised share capital of LIC shall be Rs 25,000 crore divided into 2,500 crore shares of Rs 10 each, as per the amended legislation.
The policyholders will have access to up to 10 percent of the LIC IPO issue size.
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