Life InsuranceCorp. of India is likely to buy a significant part of the assets ofthe Specified Undertaking of the Unit Trust of India, Mint reported July 13, citing "two persons with directknowledge of the plan."
LIC may spend between 250 billion rupees and 300 billionrupees to buy a third and half of the equity assets of SUUTI, a governmentmutual fund.
The LIC gave its informal consent after the governmentapproached it for the proposed sale, said a source. However, it may run intoregulatory troubles as a sale could breach the limit on equity holdings inindividual firms. LIC is only allowed to own a maximum stake of 15% in a singlecompany. Since LIC already owns shares in many companies, adding SUUTI's assetsto the mix may push LIC to breach the 15% limit in some of the companies.
The government may also sell the rest of SUUTI's assetsthrough an offer-for-sale or any other secondary market route to the public,said one of the persons cited by the publication.
SUUTI holds minority stakes in a number of listed andunlisted companies. It also holds an 11.93% stake in
As of July 12, US$1was equivalent to 67.08 Indian rupees.