The Union government is set to exercise the option to sell an additional 4% stake in Life Insurance Corp. through the ongoing offer for sale, taking the total stake on offer to 6.5%, according to reports.
The base offer covers 2.5% of LIC's equity, while the additional 4% represents the green-shoe option.
The Centre's decision comes as it looks to increase LIC's public shareholding and comply with regulatory requirements. The government currently owns around 96.5% of LIC, with public investors holding the remaining 3.5%.
If the full 6.5% stake is sold, public shareholding in the insurer will rise to 10%.
The OFS is being offered at a floor price of ₹382 per share, significantly below LIC's previous closing price of ₹428.50. At the full 6.5% size, the transaction could be worth roughly ₹31,000-35,000 crore, depending on the final sale price.
Also Read: LIC OFS: Govt To Divest Up To 6.5% Stake In State-Run Insurer; Floor Price Fixed
LIC shares came under pressure after the announcement and fell as much as 9.26% on Tuesday, hitting their lowest level in nearly four months.
The stake sale marks the first government divestment in LIC since its May 2022 IPO, through which the Centre sold a 3.5% stake and raised about ₹21,000 crore.
The government is also pursuing a broader disinvestment programme for FY27, with a target of ₹80,000 crore.
The LIC transaction could therefore provide a significant boost to the Centre's asset-sale proceeds while improving the insurer's market liquidity and widening its public investor base.
Also Read: LIC Shares Tumble 8% As Govt Launches OFS To Sell Up To 6.5% Stake
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