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IRDAI proposal sparks ₹1.12 lakh crore wealth erosion in Indian financials
Bajaj Finance led the decline with about ₹29,000 crore wiped out, while PB Fintech hit a 10% lower circuit amid proposed commission caps for insurers.
Indian financial stocks slid sharply on Thursday after India’s insurance regulator, IRDAI, proposed changes to insurance distribution and commission structures, driving about ₹1.12 lakh crore in market capitalization erosion across 12 tracked financial stocks, according to LiveMint Markets.
The biggest losses included Bajaj Finance, with roughly ₹29,000 crore wiped out, followed by PB Fintech at nearly ₹20,000 crore. HDFC Bank and Axis Bank lost about ₹15,000 crore and ₹14,000 crore, respectively, while HDFC Life dropped by more than ₹7,000 crore. Other declines included Max Financial, ICICI Prudential Life, L&T Finance, and several banks with losses around ₹3,000 crore each, in line with the broader selloff in financial services.
LiveMint Markets said the immediate concern was IRDAI’s consultation paper that would link commissions more closely to product complexity, selling effort, and the distribution channel. The regulator also proposed tighter commission limits across health, motor, and life insurance, including a 15% to 20% commission cap for new health insurance policies, with renewals and porting constrained to 5% to 10%. It also outlined first year life insurance commission ceilings ranging from 5% to 20%, depending on the policy premium payment term, while PB Fintech was locked in its 10% lower circuit.