IRDAI asks LIC to Trim Holdings in Companies to 15% or Below

Regulator Irdai has asked the life insurance behemoth LIC to prepare a roadmap to pare its stake to 15% in firms where it breaches this ceiling, but has stopped short of setting a time-frame for the same. As of end-March, LIC owned more than 15% in index majors like ITCBSE -0.04 % (16.32%) and L&T (16%), both part of the Suuti (specified undertaking of the Unit Trust of India) stakes that government owns through LIC, and state- owned Corporation BankBSE 2.98 % in which it owns 18.91%.

"We have advised LIC to reduce its stake in those companies where it owns more than 15% and submit a roadmap for the same as the regulatory norms restrict insurers to own over 15% in any firm," a senior Irdai official told PTI requesting not to be named.

The official was quick to add that the regulator has not given any time-frame as yet for the same. Also, the official said this "advisory will not be applicable in case of Corporation Bank as LIC has taken a special permission from the government for the same".

However, this advisory does not apply to LIC's holding in Corporation Bank as it had already taken a special permission from the government to increase its stake last year. LIC also owns around 15% in Axis BankBSE -0.98 % (14.49%, again part of the Suuti holdings), Uco BankBSE 1.33 % (14.5%), and IDBI BankBSE -0.90 % (13.87%) as of end March.