Rules tweaked to attract FDI in LIC IPO
Bhumesh Verma
International Corporate Lawyer | M&A | Foreign Investments | Contracts | Managing Partner @Corp Comm Legal | Adjunct Professor | Professional Upskilling and Career Coach | Author | Solution Provider
Life Insurance Corporation (LIC) has the biggest share in life insurance business in India. It had not been opened to any initial public offering (IPO) to public for subscription, unlike many other prominent Public Sector Undertakings. However, with changing times and with intent to generate revenue using inherent brand value of LIC, it is well on course to come up with its first IPO in a week’s time.
In this context, foreign investors more often than not constitute one of crucial investors segment to scale up IPO prospects of any company seeking to tap the market. However, hitherto, there was no standard ruling dealing with foreign investment in the LIC under Life Insurance Corporation Act, 1956 or any other applicable legislations.
With the intent to permit foreign investors to take part in such IPO, the Central Government has amended non-debt instrument rules (Rules) under the Foreign Exchange Management Act (FEMA), to pave way for 20% FDI in IPO-bound LIC under automatic route.
The idea is to ensure maximum participation in India’s biggest-ever public offering so far.
This amendment to Rules under FEMA is crucial and instrumental in opening doors for foreign investors to participate in LIC’s IPO.
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Regd. Insolvency Professional, LL.B- Legal Advisory (Delhi, Allahabad , Kolkata, Chandigarh, Guwahati and other NCLTs/Courts), FCMA- Cost advisor and Auditor. DISSA , Forensic and Internal Auditor, Qualified Ind. Dir.
2 年Thanks for sharing
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2 年Thanks for sharing
Aspiring Corporate Director / Management Consultant / Corporate Leader
2 年S. Syed Awees
Aspiring Corporate Director / Management Consultant / Corporate Leader
2 年Thanks for posting, Adv. Bhumesh Verma ???? As an Air Veteran ????, I wish to see, ...India is becoming "One of the #World's #Exemplary #Nation", by developing the domestic economy, (with less dependence of #FDI, which is vulnerable & easy-liquid money)..., as a Colonial era-learning experience from UK's Year-1600 founded, #EAST #INDIA #Company', who came for Business, & finally slaved India!