Budget 2025: Star Health, LIC, HDFC Life, SBI Life shares rise up to 7%, here's why 

Shares of insurance companies rose after FM Nirmala Sitharaman said FDI limit in the insurance sector has been hiked to 100% from the current limit of 74%. The change in FDI limit applies to those insurers who invest their entire premium in India.

The FM is presenting her 8th Union Budget in Parliament today. ICICI Lombard General Insurance Company stock climbed 2.62 per cent to Rs 1906.55 on BSE against the previous close of Rs 1857.75. Shares of ICICI Prudential Life Insurance Company climbed 4.23% to Rs 642.70 against the previous close of Rs 616.60 on BSE.  HDFC Life Insurance Company Ltd surged 4.56 per cent to Rs 667.25 on BSE. 

SBI Life Insurance Company stock gained 2.86% to Rs 1526.85 against the previous close of Rs 1484.35. 

Life Insurance Corporation of India added 2.86 per cent to Rs 869.65 against the previous close of Rs 845.40. Shares of Star Health also zoomed 6.73% to Rs 462.75 against the previous close of Rs 433.55 on BSE.

The move aims to align with the government's vision of "Insurance for All" by 2047. Previously, the FDI cap in insurance was hiked from 26% to 49% in 2015 and then to 74% in 2021.

The proposal to raise FDI limit to 100% is expected to attract more global insurers, raising competition and allowing new market entrants.

Balachander Sekhar, Co-founder and Chief Executive Officer, RenewBuy said, "The government’s announcement to allow 100% Foreign Direct Investment (FDI) in the insurance sector will help facilitate entry of more players into the Indian market, thereby ushering in a new wave of competition, innovation and growth. This influx will drive Indian insurers to adopt global best practices in product and processes, innovation as well as cutting-edge technologies. All of these can further help improve underwriting, claims management and customer service."

"Aligning with the view of ‘Insurance for All 2047’, a change in GST rates on insurance to improve affordability and boost penetration in the country along with a possible increase of tax exemption to encourage fresh buying of insurance policies could be expected in the forthcoming Budget,"  Axis Securities had said in its Budget preview.  

Ahead of Union Budget 2025, Emkay Global said, "While no major changes are expected, the street may watch out for (a) Any shift to direct tax code,(b) Continuity of Rs 0.5 mn exemption for non-linked savings, (c) No change in corporate tax rate."