The insurance regulator (IRDAI) has given state-owned Life Insurance Corporation of India (LIC) two years to pare its shareholdings in companies to at most 15% in a single investee company.
“We have deliberated on the road map with the Ministry of Finance and the LIC board along with certain stakeholders, and set the time limit to comply with the norm,” an official said.
Sources said LIC had acceded in principle to the order and had submitted a divestment road map. LIC holds a stake of more than 15% in 12 companies, reported Business Standard.
In 2012, the Finance Ministry allowed the state-run insurer to invest in a stake of up to 25% in a single listed company, overriding objections from the IRDAI. The Ministry's move then was seen as giving a boost to the government’s struggling massive disinvestment programme.
At that time, the investment ceiling for other insurers was 10%. In 2013, the IRDAI allowed insurers to invest as much as 12-15% in a single company, depending on the fund sizes of the insurers.