Business

LIC IPO: Central may block Chinese investment in government-backed insurance company’s public offer – report

New Delhi: The Indian government may reportedly bar Chinese investors from buying shares in Life Insurance Corporation (LIC) of India’s upcoming mega initial public offering due to underscoring tensions between the two countries.

According to a Reuters report, the Center is planning to allow foreign investors to participate in the IPO, which could help the government generate potential earnings of $12.2 billion. However, the Center could potentially discourage Chinese ownership of India’s Crown Jewel.

The state-owned insurance company has over 60% share in India’s life insurance market. The company’s assets are estimated at over $500 billion.

The political tension between the two countries had increased after the conflict in Galwan Valley last year. Since then, the Indian government has increased its scrutiny on Chinese investments, banning Chinese mobile apps.

“After the border conflict with China, it may not be business as usual. The lack of trust has grown significantly,” a government official told Reuters. The official said Chinese investments in companies like LIC could pose risks.

However, as of now, the Center has not taken a final decision on how it plans to block Chinese investments. At present, no final decision has been taken by the Centre. Read also: CEO Yogesh Ramanathan says Vinta Aeromobility expects to conduct flying car trials by 2023 and flights by 2025

Government of India is planning to sell 5% to 10% shares of LIC in the current financial year with the upcoming IPO. The Center is also looking at launching two separate phases of the IPO of the insurer to raise the requisite funds. Read also: Delhi University’s first cut-off list likely to be declared on October 1

By Naveen Bharat Staff

 

 

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