New Delhi: In a major development, the Centre on Monday announced its plans to sell up to 6.5 per cent stake in state-owned insurance giant Life Insurance Corporation of India (LIC) through a two-day offer for sale (OFS), with the floor price fixed at Rs 382 per equity share. The government will open an offer for sale in LIC on Tuesday for non-retail investors and retail investors will be able to bid on Wednesday. The move of the government aims to reduce its stake in the country’s largest insurer and meet minimum public shareholding (MPS) milestones ahead of schedule.
The government currently remains the majority shareholder in LIC and has been gradually reducing its stake since the insurer’s market debut. Now the government holds a 96.5 per cent stake in LIC and after the OFS, its shareholding is expected to reduce to 90 per cent. However, the final size of the stake sale will depend on subscription levels during the bidding process.
Announcing the OFS in a post on X, department of investment and public asset management (Dipam) secretary Arunish Chawla said that the offer will open for non-retail investors on Tuesday, while retail investors will be able to place bids on Wednesday. “OFS in LIC opens tomorrow for Non-Retail investors. Retail investors can bid on Wednesday. The government offers to disinvest 2.5 per cent equity with an additional 4 per cent as a green shoe option. Floor price has been fixed as Rs 382 per share. This will help achieve MPS milestones ahead of schedule,” Chawla said.
Generally, an OFS allows promoters of listed companies to sell shares through the stock exchange in a transparent bidding process. Typically, institutional and non-retail investors participate on the first day, while retail investors bid on the second day. The proposed stake sale forms part of the central government’s broader disinvestment programme and is aimed at increasing LIC’s public shareholding to comply with the
MPS requirements of Securities and Exchange Board of India’s (Sebi).
The Sebi had granted LIC time until May 2027 to bring down the government’s stake to 90 per cent to comply with the minimum public shareholding (MPS) requirement. “The LIC is a cornerstone of the nation’s financial sector, serving as India’s largest life insurer and the country’s second-largest public sector enterprise by market capitalisation. Its institutional eminence is recognized both domestically and globally, with LIC ranked as the fourth most valuable brand in India and the world’s third-strongest insurance brand,” Chawla said.
“Furthermore, LIC’s exceptional operational scale and market penetration are exemplified by its Guinness World Record for the most life insurance policies sold within a 24-hour period, reflecting unwavering public trust and unmatched execution capabilities,” the Dipam secretary added.
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