The Centre has announced the sale of up to a 6.5% stake in Life Insurance Corporation (LIC) through a two-day Offer for Sale (OFS), with a floor price of Rs 382 per share. The issue opens for institutional and non-retail investors on Tuesday, while retail investors can bid on Wednesday.
The government is initially offering a 2.5% stake, along with a greenshoe option to sell an additional 4%, taking the total stake on offer to 6.5%. If the entire issue is subscribed, the sale of over 82.22 crore shares is expected to generate around Rs 31,000 crore, significantly boosting the Centre’s disinvestment receipts for the current financial year.
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla confirmed the details in a post on X, stating that the government is offering 2.5% equity with an additional 4% under the greenshoe option.
The OFS floor price of Rs 382 is nearly 10% lower than LIC’s closing price of Rs 424.35 on the BSE on Monday, making the offer attractive for investors.
The stake sale is also aimed at helping LIC meet the Securities and Exchange Board of India’s (SEBI) minimum public shareholding norms well before the May 16, 2027 deadline. Currently, the government owns 96.5% of the insurance giant, while public shareholders hold the remaining 3.5%.
The government had earlier divested a 3.5% stake in LIC through its landmark IPO in May 2022, priced between Rs 902 and Rs 949 per share, raising around Rs 21,000 crore.
LIC’s market capitalisation currently stands at over Rs 5.36 lakh crore. The stock ended Monday’s session at Rs 424.35, down 0.12% from the previous close.
With this proposed stake sale, the government’s disinvestment collections are set to rise sharply. So far in the current financial year, it has raised Rs 21,082 crore through stake sales in seven public sector enterprises and remittances from the Specified Undertaking of the Unit Trust of India (SUUTI).