The central government has given a nod to Foreign Direct Investment (FDI) of up to 20 per cent via automatic route in the upcoming LIC IPO. On the recommendation of the Ministry of Finance, the cabinet took the decision. The LIC IPO date, according to media, has been fixed around March 11, 2022.
FDI has been permitted to support the disinvestment plan of the government. The investors have been skeptical about the IPO due to the current Russia Ukraine Crisis but FM Sitharaman last week made clear that LIC IPO is on the track and will be listed as per schedule. Under the current FDI policy of the government, the 74 per cent permission of FDI in the insurance sector does not apply to LIC. LIC had no provision for foreign investment before this.
Finance Minister Nirmala Sitharaman has said that the IPO is on track. According to LIC DRHP, the government has asked SEBI to sell a 5 per cent stake in the company. With this around 316 million LIC shares are expected to be sold in the share markets. The government is expecting to get Rs 63,000 crore from the LIC IPO.
