Financial services secretary DK Mittal said last month the government was going to notify a hike in the investment limit for LIC to 30% from the present 10%, which was perceived by experts as a move to rescue the governments disinvestment programme.
The government has not notified it. It is under examination, Harinarayan told reporters on the sidelines of a Ficci conference. Insurers and pension funds should be conservative in investing in a company unlike venture capital funds that are allowed by Sebi to invest up to 30% in a company, he said.
He said it would be imprudent to raise the investment cap for an insurer to 30% as any company acquiring 25% in a company has to make an open offer for buying another 26% from the public.
The Insurance Act allows LIC to hold 10% in a subscribed share capital of a company or invest 10% of its assets, whichever is less.