The Government of India has launched the much-awaited Offer for Sale (OFS) in Life Insurance Corporation of India, proposing to divest up to a 6.5% stake in the country’s largest insurer at a floor price of ₹382 per share.
The two-day OFS opened on Tuesday, August 4, for non-retail investors, while retail investors will be able to place bids on Wednesday, August 5.
If the issue is fully subscribed, the government will sell over 82.22 crore shares, generating an estimated ₹31,000 crore, making it one of the largest disinvestment exercises in recent years.
According to the Department of Investment and Public Asset Management, the government is initially offering 2.5% equity, with an additional 4% available under the green shoe option, taking the total offer size to 6.5%. The floor price of ₹382 per share represents a discount of around 10% to Monday’s closing price of ₹424.35 on the BSE. On the NSE, LIC shares had settled at ₹428.50.
The stake sale is a significant step towards helping LIC comply with the minimum public shareholding (MPS) norms prescribed by Securities and Exchange Board of India. The market regulator had granted LIC time until May 16, 2027, to increase its public shareholding to at least 10%.
Currently, the Government of India owns 96.5% of LIC. Following the proposed OFS, the government’s holding could decline to 90% if the entire 6.5% stake is sold.
LIC made its stock market debut in May 2022, when the government sold a 3.5% stake through an initial public offering (IPO) at a price band of ₹902–₹949 per share, raising nearly ₹21,000 crore.
The latest OFS marks another major milestone in the government’s disinvestment programme while also accelerating LIC’s compliance with SEBI’s public shareholding requirements.
