Govt Announces Up to 6.5% Stake Sale in LIC at ₹382 Floor Price

The Government of India has announced an Offer for Sale (OFS) to sell up to a 6.5% equity stake in Life Insurance Corporation of India (LIC) at a floor price of ₹382 per share. The two-day transaction is projected to raise approximately ₹31,000 crore for the national disinvestment tally if fully subscribed.

What Happened

The stake sale opens for non-retail investors on Tuesday, August 4, 2026, and for retail investors on Wednesday, August 5, 2026. According to Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla, who shared the announcement on X, the government is offering a base disinvestment of 2.5% equity alongside an additional 4% green shoe option. This total offering comprises over 82.22 crore shares.

The set floor price of ₹382 per share marks a 10% discount compared to LIC’s closing price on Monday, August 3, when the stock settled at ₹424.35 on the BSE, down 0.12% from the previous session.

Key Highlights

• Floor Price: Set at ₹382 per share, representing a 10% discount to Monday’s BSE closing price of ₹424.35.
• Offer Structure: A 2.5% base equity offer with an additional 4% green shoe option, totaling up to 6.5% or over 82.22 crore shares.
• Bidding Timeline: Opens August 4, 2026, for non-retail investors and August 5, 2026, for retail investors.
• Target Proceeds: Up to ₹31,000 crore expected if the issue is fully subscribed.
• Regulatory Alignment: Helps meet market regulator Sebi’s minimum public shareholding requirement ahead of the scheduled deadline.

Why This Matters

Market regulator Sebi had granted LIC time until May 16, 2027, to attain a minimum public shareholding of 10%. Prior to this OFS, the government held a 96.5% stake in LIC, having previously sold 3.5% through an Initial Public Offering (IPO) in May 2022 at a price band of ₹902 to ₹949 per share to raise roughly ₹21,000 crore. LIC currently maintains a market capitalisation of over ₹5.36 lakh crore.

Executing this up to 6.5% stake sale allows the government to meet Sebi’s minimum public float threshold ahead of the May 2027 deadline. Additionally, the transaction will significantly augment government revenues; prior to this offer, the government had collected ₹21,082 crore in the current fiscal year through stake sales across seven public sector undertakings and remittances from the Specified Undertaking of the Unit Trust of India (SUUTI).

What to Watch Next

Market participants will track investor response during the two-day bidding process, observing institutional demand on Tuesday, August 4, and retail participation on Wednesday, August 5. The final subscription figures will reveal the extent to which the 4% green shoe option is exercised and the exact amount added to the disinvestment kitty.

Frequently Asked Questions

What is the floor price for the LIC Offer for Sale?

The floor price has been set at ₹382 per share, which reflects a 10% discount from the BSE closing price of ₹424.35 recorded on Monday, August 3, 2026.

When can retail investors participate in the OFS?

The OFS opens for non-retail investors on Tuesday, August 4, 2026, and for retail investors on Wednesday, August 5, 2026.

How much equity is the government divesting in LIC?

The government is offering a base equity stake of 2.5% with a green shoe option for an additional 4%, bringing the total potential disinvestment to 6.5% or over 82.22 crore shares.

Source: Based on reporting by The Hindu.