Big update on LIC: Govt plans to sell large shareholding, Motilal Oswal, IDBI Capital likely to act as…, final decision to be taken after…; Details here
The central government is once again preparing to sell part of its stake in the country’s largest insurance company, LIC. According to reports, in the first phase of disinvestment, Life Insurance Corporation may sell about 3 per cent of its shares. Motilal Oswal and IDBI Capital are likely to act as bankers for this offer-for-sale.
A Business Today report, quoting sources, said the government plans to begin roadshows in the next two weeks to promote its planned disinvestment in LIC. In the first phase, it is considering selling between 2.5 per cent and 3 per cent of its stake. However, the exact percentage of shares to be sold and the offer-for-sale price will be finalised only after the roadshows are completed.
Government’s disinvestment target
Currently, the government holds 96.5 per cent stake in LIC. Market regulator SEBI has directed the insurer to increase its public shareholding from 3.5 per cent to 10 per cent by May 16, 2027. For FY26, the central government’s overall disinvestment target is Rs. 47,000 crore, and selling part of its stake in LIC could be a major step toward achieving it.
Reports estimate that in the first phase of the LIC stake sale, the government could raise between Rs. 14,000 crore and Rs. 17,000 crore.
LIC’s share price
On Tuesday, despite overall gains in the stock market, LIC’s share price fell sharply. The stock opened at Rs. 916, rose briefly to Rs. 920 in early trade, but then declined throughout the day, closing 3.24 per cent lower at Rs. 886.85.
With this drop, LIC’s market capitalisation fell to Rs. 5.59 lakh crore.
Stake sold earlier through IPO
This is not the first time the government has sold part of its stake in LIC. In May 2022, it sold 2.5 per cent of its total equity through the LIC IPO. The issue opened for subscription on May 4, 2022, and closed on May 9, 2022.
The IPO was subscribed nearly three times, helping the government raise Rs. 20,557 crore from the sale.
News