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April 18, 2022

India amends FEMA rules to pave way for 20% FDI in LIC

The Indian government has amended the Foreign Exchange Management Act (FEMA) rules, which will make way for up to 20% foreign direct investment (FDI) in the insurance company LIC.

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The government intends to reduce its stake in LIC through the initial public offering (IPO), reported , reported PTI via moneycontrol.com.

In February, LIC had filed the draft red herring prospectus (DRHP) with markets regulator Sebi for the IPO.

In March, Sebi had given nod to the draft papers. LIC is currently in the process of filing a request for proposal with amendments.

After the approval of the Union Cabinet, the Department for Promotion of Industry and Internal Trade (DPIIT) last month had changed the FDI policy to facilitate investment from overseas players in LIC ahead of the IPO.

A gazette notification issued recently reads: ‘These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2022.”

This notification has added a paragraph in the current policy, enabling up to 20% FDI in LIC through the automatic route.

Given that the ceiling on foreign investment for public sector banks is 20% as per the government approval route under the current FDI policy, the same has been allowed for LIC and other such corporate bodies.

The notification reads: ”Foreign investment in LIC shall be subject to the provisions of the Life Insurance Corporation Act, 1956, (LIC Act) as amended from time to time and such provisions of the Insurance Act, 1938, as amended from time to time, as are applicable to LIC.”

Free Report
img

How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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