Union Budget 2021: ICICI Lombard, ICICI Prudential, SBI Life shares rally 3-6% after Nirmala Sitharaman raises FDI limit for insurance

Insurance stocks rallied 3-6 percent after Finance Minister Nirmala Sitharaman, in her Union Budget 2021 speech, increased the foreign direct investment limit for the insurance sector to 74 percent.

In a proposal to amend the Insurance Act 1938, the government increased foreign direct investment limit for the insurance sector to 74 percent from 49 percent earlier.

"The increase in FDI limits from 49 percent to 74 percent for the insurance sector is a welcome step and will help insurance companies to raise funds to ensure their solvency is maintained in line with growing business needs," said Manoj Purohit, Partner and Leader – Financial Services Tax at BDO India.

"This will also augment foreign inflows and help attract more foreign companies," he added.

At 12:16 hours IST, ICICI Prudential Life Insurance Company was up 3.03 percent at Rs 495.70, ICICI Lombard General Insurance Company rose 2.90 percent to Rs 1,355.95 and SBI Life Insurance Company gained 2.50 percent at Rs 886.20 on the BSE.

New India Assurance Company was up 5.75 percent at Rs 134.25, General Insurance Corporation of India gained 4.69 percent at Rs 138.30 and HDFC Life Insurance Company up 1.58 percent at Rs 688.50 on the BSE.