According to a government source, India’s cabinet approved a policy revision on Saturday permitting foreign direct investment of up to 20% in Life Insurance Corp of India (LIC), facilitating the state-run insurer’s listing.

Next month, India’s largest insurance business wants to issue a 5% interest in order to generate almost $8 billion in the country’s largest initial public offering (IPO) by far.

The amendment would allow foreign direct investors to buy up to 20% of LIC’s shares through an automatic route, said the government source, who spoke on condition of anonymity after the cabinet meeting.

Under current rules, foreign investment is not allowed in the LIC, governed by the special parliament act, while 74% foreign direct investment is allowed in other private insurance companies.

The amendment would allow the government to raise the foreign direct investment limit in the LIC up to 20%, on par with the rule for state-run banks, the government source said.

The cabinet decision comes amid growing fears among some investors that the government could defer public listing of the LIC due to increasing volatility in the market after Russia’s invasion of Ukraine.

Government officials, have however, said that there was no plan to defer the listing of the insurance company – critical for plans to raise funds for budgeted spending.

In the IPO, the firm will also earmark a certain percentage of shares for policyholders, not exceeding 10% of the offer size, while the portion reserved for employees will not be more than 5% of post-offer equity share capital, according to the IPO filing. LIC employed 114,498 people as of end-March, 2021.

LIC, which was formed six decades ago when India’s insurance sector was nationalised, straddles the business in the country, with more than 280 million policies and over 60% of the insurance segment.