New Delhi. The Narendra Modi government at the Center is planning to allow foreign investment before presenting the IPO of Life Insurance Corporation, the country’s largest insurance company. However, meanwhile, information has been received that the Center will not allow China to invest in LIC’s IPO. For this, the government is making a special plan. Actually, the government believes that investments made by China in companies like LIC can create risk.
Modi government wants to stop Chinese investors from buying shares in LIC. Therefore, in view of the risk arising from investing in LIC’s IPO, the government is deliberating on banning Chinese companies. However, no final decision has been taken yet. According to sources, since last year’s conflict between Indian and Chinese soldiers on the border in the Galvan Valley of Ladakh, India is continuously taking strict measures against China. Under this, anti-dumping charges have been imposed on the products imported from China. Apart from this, many Chinese mobile apps were also banned. Along with this, agreements on many projects were terminated.
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‘Business cannot be continued amid border dispute’
There has been no official response from the Ministry of Finance and LIC, Government of India. At the same time, the Ministry of Foreign Affairs and Commerce of China have also not said anything so far. However, a government official said that after the skirmish on the Ladakh border, trade with China cannot be continued as before. India’s trust in China has decreased. He said that in such a situation, there is every hope of preventing China from investing in LIC IPO. Let us tell you that the government will present LIC IPO by the end of March 2022. The government will sell its 5 to 10 percent stake through this. It is expected to raise around Rs 1 lakh crore. Along with this, LIC will also be listed.
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Foreign investors can get approval for investment
The central government is planning to allow foreign institutional investors to buy up to 20 per cent of LIC IPO. Explain that according to the current FDI policy, 74 percent foreign investment is allowed in the insurance sector under the automatic route. However, these rules do not apply to LIC. Under the existing rules, no foreign investor can invest in LIC. Now if the government allows 20 percent investment, then the way for foreign investors to invest in LIC will open. At present, the government has selected 10 merchant bankers for IPO management.
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