LIC Share Price Falls Nearly 7% As Government Announces OFS to Sell Up to 6.50 Per Cent Stake

On Tuesday, Indian equity benchmark indices traded lower, with the benchmark Nifty 50 index falling 148.20 points, or 0.60 per cent, to 24,626.10. Amid the weak market sentiment, Life Insurance Corporation of India (LIC) share price fell 6.92 per cent to Rs 398.85 after the Government of India announced an Offer for Sale (OFS) of up to 6.50 per cent stake in the company through the stock exchange mechanism.

Government Announces OFS in LIC

The President of India, acting through the Department of Financial Services, Ministry of Finance, Government of India, has proposed to sell up to 31,62,49,885 equity shares of LIC, representing 2.50 per cent of the company's total issued and paid-up equity share capital, under the base offer.

The government has also retained an oversubscription option to sell an additional 50,59,99,816 equity shares, representing 4.00 per cent of LIC's equity share capital.

If the oversubscription option is exercised, the total offer size will increase to 82,22,49,701 equity shares, equivalent to 6.50 per cent of the company's total issued and paid-up equity share capital.

Floor Price Fixed at Rs 382 Per Share

The government has fixed the floor price at Rs 382 per equity share for the OFS. Retail investors and eligible employees will receive a discount of Rs 10 per equity share on the cut-off price.

The OFS will open for non-retail investors on August 4, 2026, while retail investors and eligible employees can bid on August 5, 2026.
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Employee Reservation

The government has reserved 50,00,000 equity shares, equivalent to 0.04 per cent of LIC's total issued and paid-up equity share capital, for eligible employees. Employees will be eligible to apply for shares worth up to Rs 5 lakh under the employee category, subject to the terms of the offer.

Objective of the Offer

According to the exchange filing, the OFS is being undertaken to achieve the minimum public shareholding requirement prescribed under the Securities Contracts (Regulation) Rules, 1957, and applicable SEBI regulations. The transaction will be conducted through the stock exchange mechanism.

About LIC India 

Life Insurance Corporation of India (LIC) is India's largest life insurer and the country's largest institutional investor. Established in 1956, the company offers a wide range of life insurance products, including individual, group, pension, savings and protection plans, through an extensive distribution network comprising agents, bancassurance partners, corporate agents, brokers and digital channels. The Government of India remains the promoter of LIC and continues to hold a majority stake in the company following its public listing in 2022.

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Disclaimer: The article is for informational purposes only and not investment advice.