News Column


July 25, 2014

49% FDI has been sanctioned by the Cabinet in the insurance sector.

Shares of Bank of India one of the promoters of Star Union Daiichi insurance was up 5.01% at Rs 301, Max India, the promoter of a life and non-life company, has achieved 3.76% to trade at Rs 331, Exide Industries has benefitted 1.87% at Rs 163.

The gains has also been registered by Union, IDBI, Andhra Bajaj Finance, PNB and Canara Bank. Shares of ICICI Bank, HDFC, and Kotak Mahindra Bank were marginally lower in early trade.

In some cases the pricing formula for selling the stake has also been biased while in some companies the agreement is for transfer of stake at market value.

The 49% stake would be granted under the Foreign Investment Promotion Board (FIPB) route as against the current automatic approval process.

FIPB approval need could entail that the authorizations could be on a case by case basis.

The FIPB requirement has enhanced concerns in respect of companies where the foreign partner has willy-nilly management control via the right to hire a CEO.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: TendersInfo (India)

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