LIC to get enough time to offload stack

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Few weeks back, in order to make a level playing field between private insurers and LIC, IRDA has issued investment guidelines restricting any Indian insurer from investing more than 10 per cent in a company. Earlier LIC was allowed to hold up to 30% of stack in a company.


LIC as a promoter holds 30% stacks in LIC Housing finance

The biggest impact of this is naturally on LIC.

Corporation Bank, Cipla, Mahindra and Mahindra, Maruti Suzuki, Mahanagar Telephone Nigam Ltd, Tata Motors, Hindustan Petroleum Corp, Ranbaxy Labs, Oriental Bank, Dr Reddy's Labs, Tata Steel and Reliance Infrastructure are few of the other companies in which LIC holds more then 10% stack.

In order to comply with the guidelines LIC may have to sell Rs. 13,897 crore worth of stocks.

In order to have the offloading operation smoothly so that return on the stack should not be low, IRDA(Insurance Regulatory and Development Authority) will provide reasonable time frame to LIC.

This will help LIC a lot as selling stock in current market condition would be a loosing bet.

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