With reference to the shareholding of the National Stock Exchange (NSE), consider the following statements: 1. Insurers are permitted to hold up to 15% of NSE shares subject to SEBI approval. 2. The combined stake of the five state-run insurers will fall to 7.5% after the IPO. 3. LIC remains the largest shareholder with a 10.72% stake. Which of the statements given above is/are correct?

General Insurance Corporation of India, New India Assurance, National Insurance, United India

GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims· 7 September 2026

Solvency ratios and capital market investments: a GS3 Economy and Financial Markets case study.

Why in news

Five state-run general insurance companies (GIC, New India Assurance, National Insurance, United India, and Oriental Insurance) are divesting their stakes in the NSE IPO to improve solvency ratios.

Background

The five insurers are selling a combined stake of 165 million shares, reducing their total holding from 6.7% to 5.1%. LIC remains the largest shareholder with a 10.72% stake and retains its position.

Facts for Prelims

FactThe five insurers' combined stake in NSE will fall from 6.7% to 5.1% following the IPO.
BodyNSE (National Stock Exchange) opened in 1994 and is India's largest exchange by trading volume.
FactLIC holds 265.28 million shares, representing 10.72% of the NSE.
FactInsurers are permitted to hold up to 15% of NSE shares subject to SEBI approval.
FactAs of March 2025, Oriental Insurance reported a solvency ratio of -1.03.

Prelims practice question

With reference to the shareholding of the National Stock Exchange (NSE), consider the following statements:

Insurers are permitted to hold up to 15% of NSE shares subject to SEBI approval.
The combined stake of the five state-run insurers will fall to 7.5% after the IPO.
LIC remains the largest shareholder with a 10.72% stake.

Which of the statements given above is/are correct?

(a)1 only
(b)3 only
(c)1 and 3 only
(d)1, 2 and 3

Show answer

Answer: (c) 1 and 3 only — Statements 1 and 3 are correct. Statement 2 is incorrect: The combined stake will fall to 5.1%.

For Mains

Q. Discuss the significance of solvency ratios for state-run insurance companies and the role of capital market investments in strengthening their financial buffers.

Dimensions to cover in your answer

Solvency buffer: Addressing negative solvency ratios in state-run insurers to ensure long-term claim-paying capacity
Capital infusion: Utilizing IPO proceeds to strengthen balance sheets and improve mark-to-market gains
Regulatory oversight: SEBI's role in capping and approving institutional shareholding in stock exchanges

Keywords: Solvency Ratio · Offer for Sale · Mark-to-Market Gain · Capital Buffer · Divestment · Public Listing

Read the full news →Source: Economic Times ↗

More Economy notes

Tata Sons Faces RBI Deadline, Minority Shareholders Push for IPO · 13 September 2026
Court Rejects Auditor's Bid to Undo Election Loss, Upholds Neutrality Rules · 13 September 2026
Sebi's Demat 2.0 pilot raises ₹1,025 crore in tokenised bond sales · 12 September 2026
SEBI Proposes Major Changes: New Settlement Prices, Market Timings Up for Debate · 12 September 2026
Geojit: Rising Tensions Push Countries to De-Dollarize, Gold Soars · 12 September 2026
Telangana women's groups generate ₹4.5 lakh monthly from new 1-MW solar plant · 11 September 2026

All Economy current affairs →

This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.