Govt to Sell 6.5% LIC Stake for ₹31,000 Crore! Big Disinvestment Move 🏦
Govt to Sell 6.5% LIC Stake for ₹31,000 Crore! Big Disinvestment Move 🏦
India's government is set to offload a 6.5% stake in LIC via an OFS at ₹382/share, aiming for ₹31,000 crore! Discover how this major disinvestment impacts the market and LIC's public shareholding.
The Indian government is gearing up for a significant financial move, planning to sell up to a 6.5% stake in the Life Insurance Corporation (LIC) through a two-day Offer for Sale (OFS). This major share sale is set to kick off on Tuesday, August 4, 2026, offering shares at a floor price of ₹382 each. The offer will open for non-retail investors on Tuesday and for retail investors on Wednesday, August 5.
If fully subscribed, this sale of over 82.22 crore shares is projected to inject approximately ₹31,000 crore into the government's disinvestment kitty. Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla confirmed the government's plan to disinvest 2.5% equity, with an additional 4% available as a green shoe option.
The chosen floor price of ₹382 per share represents a 10% discount compared to LIC's closing price of ₹424.35 on the BSE on Monday, August 3. This strategic discount aims to attract investors and ensure the success of the offering.
A key objective behind this share sale is to help LIC meet the minimum public shareholding requirement mandated by market regulator SEBI. LIC has been given until May 16, 2027, to achieve at least 10% public shareholding. Currently, the government holds a substantial 96.5% stake in the insurance giant.
This isn't the first time the government has diluted its stake in LIC. An initial public offering (IPO) in May 2022 saw a 3.5% stake sold at a price band of ₹902-949 per share, raising around ₹21,000 crore. LIC currently boasts a market capitalization exceeding ₹5.36 lakh crore, highlighting its significant presence in the Indian financial landscape.
As of Monday, August 3, LIC shares closed slightly down at ₹424.35 on the BSE. This latest disinvestment initiative contributes to the government's ongoing efforts to monetize public sector assets; so far this fiscal year, ₹21,082 crore has been raised through stake sales in seven public sector undertakings and remittances from SUUTI.
