India's Rule on Equity Sales Excludes Insurers

India's Insurance Regulatory and Development Authority (IRDA) clarifies that the Reserve Bank of India's (RBI) pricing guidelines for equity shares will not apply to insurance companies, says the Economic Times.

 

In May, RBI issued revised pricing guidelines for transfer of shares to foreign investors. Under the new guidelines, "the price of shares transferred by way of sale shall not be less than the price at which a preferential allotment of shares can be made under the Securities and Exchange Board of India (SEBI) Guidelines, as applicable, provided that the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares.”
 

Following the IRDA's clarification, "promoters of insurance companies, who have cut deals with their foreign partners to sell equity at fixed price, will now be able to stick to the contract."
 

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