Union Budget: Insurance scrips trade mixed after FDI cap hike announcement

Written by PTI | New Delhi | Updated: Jul 10 2014, 18:26pm hrs
Budget, InsuranceFM Arun Jaitley today proposed raising the FDI cap from 26 per cent to 49 per cent in insurance sector. (Reuters)
Shares of companies that run insurance business saw mixed trend at the BSE after Finance Minister Arun Jaitley today proposed raising the Foreign Direct Investment (FDI) cap from 26 per cent to 49 per cent.

Max India was down 1.93 per cent and Reliance Capital shares were trading 1.32 per cent lower on the BSE.

Shares of Religare Enterprises was down 1.96 per cent while HDFC was quoting almost flat.

On the other hand, shares of Aditya Birla Nuvo was up 2.03 per cent and Bajaj Finserv gained 1.28 per cent.

In a big relief to the capital-starved private insurance sector, Jaitley today proposed raising the FDI cap.

"The insurance sector is investment starved. Several segment of insurance sector need an expansion. The composite cap of the insurance sector is proposed to be increased to 49 per cent from the currently level of 26 per cent with full management and control through the FIPB route," he said while presenting the Budget for 2014-15.

The move would help insurance firms to get much needed capital from overseas partners.

In the broader market, the benchmark Sensex was trading at 25,292.04, down 152.77 points at 1215 hrs.