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Informist, Tuesday, Aug. 4, 2026

 

--Govt to exercise 4% greenshoe option in LIC OFS

 

NEW DELHI – The government will exercise the greenshoe option and sell an additional 4% stake in Life Insurance Corp. of India through an offer for sale, the company informed the exchanges Tuesday. The government had offered to sell up to 6.5% stake in the insurance behemoth through an offer for sale, including a base issue size of 2.5% and a greenshoe option of 4%. The issue opened Tuesday for non-retail investors. Retail investors can bid Wednesday.

 

Divestment Secretary Arunish Chawla had said Tuesday that the 6.5% stake sale will help LIC 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 Contracts (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 INR 382. Shares of LIC fell Tuesday, closing at INR 391.30 on the National Stock Exchange, down 8.7% from Monday. 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 more than INR 314 billion from the 6.5% stake sale, 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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