Shares of 8 companies that run insurance business rose by 2.31% to 11.19% on BSE on reports the finance ministry could recommend an increase in the limit on foreign direct investment in insurance sector to 49% from 26%.
Reliance Capital (up 11.19%), Max India (up 11.02%), Aditya Birla Nuvo (up 4.39%), State Bank of India (up 4.23%), Religare Enterprises (up 2.89%), ICICI Bank (up 2.80%), Bajaj Finserv (up 2.63%) and HDFC (up 2.31%), edged higher.
The S&P BSE Sensex rose 467.51 points, or 1.93% at 24,684.85.
The ministry is likely to propose capping of voting rights for foreign investors so as to ensure that the control of the critical sector involving lifetime's savings of a large number of people does not pass into foreign hands, reports suggest. The government will also discuss the feasibility of allowing 49% foreign investment in the sector with FDI retained at 26% and rest through foreign institutional investors (FII), reports added.
HDFC owns a controlling stake in HDFC Standard Life Insurance. ICICI Bank holds 73.90% in the ICICI Prudential Life Insurance Company. State Bank of India holds 74% in the SBI Life Insurance Company. Aditya Birla Nuvo owns stake in Birla Sun Life Insurance Company. Reliance Capital holds stake in Reliance General Insurance Company. Bajaj Finserv holds 74% in Bajaj Allianz General Insurance. Max India operates insurance business. Religare Enterprises operates AEGON Religare Life Insurance Company.
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