Centre Offers Up to 6.5% LIC Stake Sale at ₹382 per Share

The Government of India has launched an Offer for Sale (OFS) to divest up to a 6.5 per cent stake in Life Insurance Corporation of India (LIC), aiming to raise nearly ₹31,000 crore while advancing its broader disinvestment strategy and helping the insurer meet regulatory public shareholding norms.

The OFS opened for non-retail investors on Tuesday, while retail investors can bid on Wednesday. The government has fixed a floor price of ₹382 per share, a 10 per cent discount to LIC’s Monday closing price of ₹424.35 on the BSE.

The sale includes an initial 2.5 per cent equity stake with an additional 4 per cent greenshoe option, taking the total offer to over 82.22 crore shares if fully subscribed. According to Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla, the structure is intended to maximise investor participation while supporting the government's asset monetisation programme.

The transaction is significant as it will help LIC comply with the Securities and Exchange Board of India (SEBI) requirement of maintaining at least 10 per cent public shareholding. The regulator has given LIC until May 16, 2027, to meet the norm. Following its ₹21,000 crore IPO in May 2022, the government still holds a 96.5 per cent stake in the insurer.

The stake sale also underlines the Centre’s strategy of using disinvestment to generate non-tax revenue, broaden public ownership of state-run enterprises, improve market liquidity, and strengthen corporate governance while retaining majority ownership in strategically important public sector companies.

With a market capitalisation of over ₹5.36 lakh crore, LIC remains India's largest insurer. Its shares closed at ₹424.35 on Monday, down 0.12 per cent. Before this OFS, the government had already raised ₹21,082 crore in the current financial year through stake sales in public sector undertakings and remittances from the Specified Undertaking of the Unit Trust of India (SUUTI), reinforcing disinvestment as a key pillar of its fiscal strategy.