Modi government's approval of foreign investment in the country's largest IPO, find out the reason behind the decision
Central government's big decision to hit LIC's IPO
Approves 20% FDI in LIC's IPO
The government is selling five per cent stake in LIC
The government will get Rs 63,000 crore
The central government has taken a big decision regarding the largest IPO in the history of the country. A meeting of the Union Cabinet chaired by Prime Minister Narendra Modi on Saturday approved 20 per cent FDI through automatic route for LIC's IPO. The decision has been taken for the disinvestment facility of LIC. The decision was taken to streamline the disinvestment process of the country's largest insurance company.
Why did the central government take such a decision?
The limit for FDI in government banks is 20 per cent, so the limit for LIC is 20 per cent. With the approval of 20 per cent FDI, the way for foreign investors to invest in this IPO has become easier, so when this IPO is announced, foreigners will also be able to fill it, which will make the IPO a hit. Reason for FDI approval through automatic route
Sources said that LIC, like other companies in the insurance sector, has allowed FDI through automatic route to speed up the process of raising funds. More FDI will help in domestic finance, technology transfer, skill development for strong economic growth and development of other sectors. The government approved LIC's IPO in July last year and recently submitted its draft to SEBI. The IPO could come around March 13-14.