Life Insurance Corporation of India (LIC) shares came under sharp selling pressure on Tuesday after the Centre announced an offer for sale (OFS) to divest up to a 6.5% stake in the insurer.
The stock fell as much as 7.92% to an intraday low of Rs 390.70.
At 9:20 am, LIC shares were trading 6.5% lower at Rs 396.75, underperforming the broader market. The BSE Sensex was up 0.21% at 78,801.
ALSO READ: LIC OFS: Govt To Divest Up To 6.5% Stake In State-Run Insurer; Floor Price Fixed
The Department of Investment and Public Asset Management (DIPAM) said the OFS will open for non-retail investors on Tuesday and retail investors on Wednesday.
The government is offering to sell a 2.5% equity stake, with an option to offload an additional 4% through the green shoe option. The floor price has been fixed at Rs 382 per share.
According to the government, the stake sale is aimed at helping LIC meet the minimum public shareholding (MPS) requirement ahead of schedule.
As of June 2026, promoters, including the Centre, held 96.5% of LIC, while public shareholders owned the remaining 3.5%, according to BSE data. LIC has until May 16, 2027, to increase its public shareholding to 10%, following the government's revised timeline.
If the green shoe option is fully exercised, the insurer will meet the minimum public float requirement.
The government also has a longer-term target of reducing its stake in LIC to 75% by May 2032, in line with public shareholding norms.
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