Life Insurance Corporation of India has asked the Insurance Regulatory & Development Authority to allow it a shareholding of up to 20 per cent in a company.

The move comes barely two weeks after Irda's new investment guidelines capped the holding in one company at 10 per cent and mandated a 25 per cent group exposure limit.

An LIC [Get Quote] team headed by chairman T S Vijayan and Managing Director Thomas Mathew met Irda officials in Hyderabad to press for its demand.

"LIC has asked Irda for a special dispensation. It wants permission to invest up to 20 per cent in a single investee company as its fund size is large," said a source close to the development.

Vijayan refused comment, but Mathew said it was a routine meeting and declined to disclose details. Irda chairman J Hari Narayan could not be reached for comment.

The public sector insurance company holds over 10 per cent in 39 listed blue-chip companies. The market fears that the prices of these shares would crash and even the market indices would be impacted if LIC starts selling on these counters.