- The government is exploring options beyond OFS for LIC stake sale including QIP and FPO
- Investor roadshows were held in Mumbai, Singapore, the UK, and the US with positive feedback
- The stake sale size is undecided and will depend on market appetite and conditions
LIC Stake Sale: The government is actively exploring multiple options beyond a standard Offer for Sale (OFS) to pare its stake in the country's largest state-run insurer Life Insurance Corp. (LIC), sources told NDTV Profit. The government is weighing alternative routes for divesting its stake in the insurance behemoth, including a Qualified Institutional Placement (QIP) or a Follow-on Public Offer (FPO).
While the government is evaluating all available options, no final decision has been made yet. An official confirmed that the government is not strictly committed to the OFS route and is carefully considering which mechanism will yield the best results for the stake dilution. Preparations for the stake sale are already underway, with investor roadshows having recently concluded.
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LIC Stake Sale: Roadshows held across hubs
These roadshows, which spanned across major financial hubs including Mumbai, Singapore, the UK, and the US, generated positive feedback from both domestic and overseas investors, according to official sources. The exact size of the stake sale remains undecided and will be carefully calibrated based on market appetite, said the officials in knwledge of the matter.
However, sources indicate that the government is currently targeting a launch in the second quarter (Q2) of the current fiscal, subject to prevailing market conditions. The upcoming divestment follows the government's initial public offering (IPO) of LIC in May 2022, where it successfully divested a 3.5% stake in the state-run insurer. Currently, the government holds a 96.5% stake.
The Department of Investment and Public Asset Management, under India's Finance Ministry, is working with Goldman Sachs Group Inc., Motilal Oswal Investment Advisors Ltd., BNP Paribas SA and IIFL Capital Services Ltd. to manage the transaction, reported Bloomberg in May. The insurer has been granted 10 years from its 2022 listing to meet the Securities and Exchange Board of India's minimum 25% public shareholding requirement, giving it until May 2032 to comply.
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