The Indian government will sell up to a 6.5% stake in Life Insurance Corporation of India through an offer for sale, an exchange filing showed on Monday, as the insurer seeks to meet a regulatory requirement to raise its public shareholding.
The country's market regulator has allowed LIC to meet a minimum 10% public shareholding requirement by May 16, 2027. If fully exercised, the offer for sale would raise LIC's public shareholding to 10% from 3.5% currently.
"This (OFS) will help achieve MPS milestones ahead of schedule," the divestment secretary said in a post on X.
LIC, the country's largest insurer, listed in May 2022 in one of India's biggest initial public offerings, with the government selling a 3.5% stake. The latest offer for sale marks the government's first divestment in the insurer since the listing.
LIC's offer for sale consists of a base offer of up to a 2% equity stake in the company, with an option to sell an additional 4.5% stake. It will open for non-retail investors on Tuesday and for retail investors on Wednesday.
The floor price has been set at 382 rupees per share. At the floor price, the 6.5% stake would be valued at 314.1 billion rupees ($3.29 billion).
LIC shares ended 0.9% higher on Monday at 428.5 rupees.
The sale comes as India pushes ahead with its divestment programme, having set a divestment and asset monetisation target of 800 billion rupees for fiscal 2027.
It has collected 212 billion rupees through stake sales so far this year, including via OFS in companies such as NHPC , Coal India and Indian Railway Finance Corp .
