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Informist, Monday, Aug. 3, 2026

 

--Govt: To sell up to 6.5% stake in LIC through OFS Tue-Wed

--Govt: Floor price for LIC OFS fixed at INR 382 per share
--Govt: To hit minimum public shareholding norm before schedule via LIC OFS

 

NEW DELHI – The government will sell up to 6.5% stake in Life insurance Corp. of India through an offer for sale, Divestment Secretary Arunish Chawla said Monday. The offer for sale will open Tuesday for non-retail investors and Wednesday for retail investors, Chawla said.

 

"Government offers to disinvest 2.5% equity with an additional 4% as green shoe option," Chawla said in a post on X. The floor price for the transaction has been fixed at INR 382 per share.

According to Chawla, the 6.5% stake sale will help the insurance behemoth to meet the Securities and Exchange Board of India's minimum public shareholding norm ahead of schedule. The government currently holds 96.5% in LIC and the regulatory mandate is to lower the stake to 90% within five years of listing. The government had sold 3.5% stake in the insurer through an initial public offering in the financial year 2022-23 (Apr-Mar), raising INR 205.16 billion.

 

As such, SEBI's Securities Contract (Regulation) Rules mandate that all listed companies must comply with the minimum public shareholding norm within five years of listing. All listed companies, including public-sector companies, must have a minimum public shareholding of 25%, as per the norms. LIC, however, is required to have only 10% free float in the first five years and has been given an additional five years to bring the promoter stake down to 75%.

 

The floor price for the offer for sale has been set at a discount of almost 11% from the stock's current price. Monday, shares of LIC closed at INR 428.50 on the National Stock Exchange, up 0.9% from Friday. For the March quarter, the company had reported a net profit of INR 234 billion and net premium income of INR 1.65 trillion.

 

At the floor price, the government will earn over INR 120.80 billion from selling just 2.5% stake in LIC. If the government exercises the greenshoe option and sells the entire 6.5% stake, it will collect more than INR 314 billion, higher than what it has got from stake sales and asset monetisation so far in FY27.

 

The government has set an ambitious target of INR 800 billion from miscellaneous capital receipts in FY27. It has pressed the accelerator on its divestment plan and announced minority stake sales in many state-owned companies. So far this fiscal, it has collected INR 275.68 billion from stake sales and asset monetisation.  End

 

Reported by Priyasmita Dutta

Edited by Rajeev Pai

 

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