Shares of companies engaged in insurance business such as Aditya Birla Nuvo, Max India, Reliance Capital and Bajaj Finserv have extending their previous day’s and trading higher up to 7% after the Cabinet on Thursday granted approval for increase of foreign direct investment (FDI) limit in the insurance sector from the present 26% to 49%.
‘It has been a long pending step in the right direction to boost the confidence of the global insurers and investors. The insurance industry has been struggling for a while on capital, which will be now be forth coming. There should also be more product and channel innovation with increase in completion expected,” said Shashwat Sharma – Partner, KPMG India.
Among the individual stocks, Max India has rallied 7% to Rs 247 in opening deals on the Bombay Stock Exchange. Aditya Birla Nuvo and Reliance Capital are up by around 4% each at Rs 984 and Rs 473 respectively, while Bajaj Finserv by 3% at Rs 979.