Reliance Capital, Max India Gain After Nod for Insurance Ordinance

Shares of insurance services providers zoomed on Wednesday after the Cabinet approved an executive order to implement insurance reforms.

Reliance Capital surged over 4 per cent, Exide Industries gained nearly 3 per cent, while Max India zoomed as high as 5 per cent.

Max India, which operates hospital chain is also the domestic promoter of Max Life Insurance, while Exide Industries own 100 per stake in Exide Life Insurance, formerly known as ING Vysya Life Insurance.

Under the new insurance reforms, foreign farms can increase their participation in insurance joint ventures from 26 per cent to 49 per cent, which, experts say, will provide the much-needed impetus to the insurance sector.

Existing companies can now raise further capital from their foreign partner to expand the reach of their business.

Insurance is still underpenetrated in India. On an average only 2 per cent people are insured in India, which is much lower that the global average.