Increase in LIC investment cap a short-term positive, say experts
According to estimates, the move is likely to authorise cash-rich LIC to invest about R50,000 to R60,000 crore so that it is equipped to aid the divestment process. “This is an enabling clause that will help government achieve its divestment targets,” said the head of a domestic investment bank, who has been involved in divestment issuances. “They already hold more than 10% in a few companies and the notification will only provide them with more flexibility. I, however, do not see any impact on the broader market as such,” he said, wishing not to be named.
There are at least 30 companies in which LIC held more than 11% stake as of September, including seven public sector banks like Syndicate Bank, Punjab National Bank, Bank of India, Union Bank, Bank of Baroda and SBI. It held 25.5% and 18.8% in Corporation bank and MTNL, respectively, shows the data.
Be the first to comment.