India is considering allowing foreign direct investment in Life Insurance Corporation, according to a person familiar with the matter, which could enable a single overseas investor to buy a large stake in the firm that’s headed for a mega-IPO. Any strategic investment would be subject to a cap, though it’s unclear at what level that would be set, the person said, asking not to be identified as the deliberations are private. Participants at a meeting earlier this month noted a 20 per cent FDI limit on State-run banks, the person said. Allowing FDI in LIC would permit so-called strategic investors such as massive pension funds or insurance firms to participate in the initial public offering, which is slated to be India’s largest ever. The Reserve Bank of India defines FDI as purchase of a stake that’s 10% or larger by an individual or entity based abroad. Bankers seeking to arrange LIC’s IPO are due to make presentations to the government.
