LIC IPO: Centre could block Chinese investment in state-backed insurer’s public offer - Report

New Delhi: The Indian government could reportedly block Chinese investors from buying shares in the Life Insurance Corporation (LIC) of India’s upcoming mega initial public offering due to the underscoring tensions between the two nations.

According to a report by Reuters, the Centre is planning to allow foreign investors to participate in the IPO that could help the government rake in a potential $12.2 billion. However, the Centre could potentially discourage Chinese ownership of India’s crown jewel. 

The state-owned insurer enjoys more than a 60% share of India’s life insurance market. The company’s assets are valued at more than $500 billion. 

The political tensions between the two nations escalated last year after the Galwan Valley clashes. Since then, the Indian government has increased its scrutiny on Chinese investments while banning scores of Chinese mobile apps. 

"With China after the border clashes, it cannot be business as usual. The trust deficit has significantly widen(ed)," A government official told Reuters. The official added that Chinese investment in companies like LIC could pose risks.

However, as of now, the Centre hasn’t taken a final decision on how it’s planning to block Chinese investment. At present, no final decisions have been made by the Centre. Also Read: Vinata Aeromobility hopes to perform flying car trial by 2023 and flights by 2025, says CEO Yogesh Ramanathan

The Indian government is planning to sell  5% to 10% shares of LIC in the ongoing fiscal year with the upcoming IPO. The Centre is also mulling over launching two separate tranches of the IPO of the insurer to raise the expected funds. Also Read: Delhi University's first cut-off list likely to be announced on October 1