LIC OFC Stake to 90% in Rs 31,552-Crore Share Sale

The Government of India has offloaded a 6.5% stake in Life Insurance Corporation of India through an Offer for Sale, raising roughly Rs 31,552 crore in the process. The Department of Financial Services, acting on behalf of the President of India as LIC's promoter, sold just over 82.23 crore equity shares, bringing the government's holding down from 96.50% to an even 90.00%.

How the sale played out

The OFS ran across two sessions on the NSE and BSE — August 4 for institutional and other non-retail bidders, and August 5 for retail investors and anyone carrying forward unallotted bids. What started as a base offer of 2.50% of the company (about 31.6 crore shares) ended up more than doubling in size, since the government fully exercised its 4% oversubscription option, taking the total sold to 6.5%.

The deal was formally disclosed on August 7 under SEBI's takeover regulations.

Pricing and allocation

Non-retail investors got in at a cut-off price of Rs 383.10 a share, while retail buyers and eligible employees received a Rs 10 discount, paying Rs 373.10. The floor price for the offer was fixed at Rs 382. Shares were allotted on a price-priority basis, and the structure reserved at least a quarter of the offer for mutual funds and insurers, with a minimum 10% carved out for retail participants (those bidding up to Rs 2 lakh).

What it means

That the oversubscription option was fully taken up suggests demand comfortably outstripped the base offer, and pricing landed just above the floor — a sign of healthy appetite for the stock at current levels. By stopping at exactly 90%, the government retains firm majority control while still meeting its disinvestment targets. The reservation for mutual funds and insurers also means a chunk of the newly floated shares landed with long-term institutional holders rather than short-term traders.

LIC shares closed at Rs 395.50, up 0.38% on the day, though the stock remains down over 10% over the past year.