Shares of insurance companies gained between 1-11% on Thursday on hopes that the insurance bill would be passed in the Rajya Sabha later in the day.

“The likely passage of the Insurance Bill, as per some media reports, in the Upper House (Rajya Sabha) … paves the way for global insurance majors to hike their stake in local insurance companies to 49% from the previous cap of 26%. Many insurance players like Bupa, Prudential, Allianz, Standard Life etc would be keen to raise their holdings to the upper cap once allowed,” said Ajay Bodke, Head – Investment Strategy and Advisory, Prabhudas Lilladher. The bill has the potential to bring in foreign direct flows to the tune of R40,000 – 50,000 crore, he added.

Reliance Capital (10.9%), Max India (5.5%), Exide Industries (4.8%), Bajaj Finserv (1.7%) and Religare Enterprises (1.6%) were among the major gainers. The BSE benchmark Sensex ended 0.9% higher to 28,930.41 points on Thursday.

Recent media reports have suggested that the insurance bill will be passed in Rajya Sabha as the Government and the opposition parties have reached an understanding on the bill. The bill was cleared by the Lok Sabha last week, where the BJP enjoys majority.

Source: TFE