According to a report of news agency Reuters, Chinese investors are going to be blocked by the government of India from buying shares in the Indian insurance giant Life Insurance Corp (LIC) which is about to go public said, four senior government officials and a banker.
With assets of more than $500 billion, the LIC which is owned by the government is considered a strategic asset imposing more than 60 percent of the life insurance market. While it is being planned by the government to allow foreign investors to participate which will be India’s biggest ever IPO worth a potential $12.2 billion, said Reuters.
Last year after the Chinese soldiers engaged on the disputed Himalayan border which developed political tension between the countries, leading India to limit Chinese investment in sensitive companies and sectors, banning many Chinese mobile apps and less import of Chinese goods. One of the government officials said to Reuters, “With China, after the border clashes it cannot be business as usual. The trust deficit has significantly widened.”
Whereas there wasn’t any response by the finance ministry and LIC on Reuter’s emailed requests for comment, nor China’s foreign ministry and commerce ministry responded.
It is being hoped to sell 5 percent to 10 percent of LIC this financial year to raise 900 billion rupees which are going to ends in March as it is being aimed by Prime Minister Narendra Modi’s administration to solve budget constraints, yet it is on the government to decide whether it will sell one tranche of shares seeking to raise the full amount or choose to seek the funds in two tranches says, sources.
The government may block the Chinese investment from stoping the Chinese investors from becoming cornerstone investors in the IPO, but still, the Chinese investors can buy shares in the secondary market says one government official and the banker.