NEW DELHI: The Department for Promotion of Industry and Internal Trade (DPIIT) on Wednesday said that it will approach the cabinet to seek changes in the foreign direct investment (FDI) policy to facilitate disinvestment of Life Insurance Company (LIC). While addressing the press, DPIIT Secretary Anurag Jain mentioned that an inter-ministerial consultation on the matter is at its last stage and he is hopeful it will happen very soon.
As per the current FDI policy, 74 per cent foreign investment is permitted under the automatic route in the insurance sector. But these rules do not apply to Life Insurance Corporation of India (LIC), which is administered through a separate LIC Act.
As per SEBI rules, both FPI and FDI are permitted under public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation. The Cabinet had in July last year approved the initial public offering (IPO) of LIC and the stake sale is being planned in the current March quarter.
"The finance minister has directed that the disinvestment has to be completed during the current financial year. So, obviously, we will try to expedite it (Cabinet note) as much as possible," said Jain. On the logistic policy, Jain said the government is working on it and it is at a very advanced stage.
"As far as logistic policy is concerned it has come to our department just about a month or half back. This came to us with a PM Gatishakti thing because the logistic division was transferred to us. It is a matter of doing consultation," said Jain.
The IPO-bound Life Insurance Corporation (LIC) reported Rs 1,437 crore net profit in the first half of 2021-22 compared to Rs 6.14 crore in the same period in the previous year.
The state-owned life insurer also reported Rs 1,452 crore in revenue during the period. LIC would most likely file its IPO paper with the Securities and Exchange Board of India (SEBI) in the first week of February.