Public sector insurance behemoth Life Insurance Corp of India (LIC) rescued the government’s offer for sale of shares held in Indian Oil Corporation (IOC) on Monday.
LIC is counted as an institutional investor and not part of the government even though it is owned and controlled by the central government.
The country’s largest life insurance company picked 209 million shares or around 86 per cent of the total shares sold by the government. It raised its holding in the company from 2.52 per cent to 11.11 per cent in the process, as per regulatory filings.
The government had sold a total of 242.8 million shares in the public sector oil firm as part of its disinvestment process.
State-owned life insurer LIC has been a saviour for the government in the past in several such disinvestment plans where it bought stake in other public sector units.
Early this year it shelled out around Rs 10,200 crore (approximately $1.64 billion then) in the offer for sale involving government’s stake in Coal India. With the acquisition, the total holding of LIC in Coal India has risen to 7.24 per cent, up from 2.73 per cent earlier.
In March 2014, the government-controlled Specified Undertaking of Unit Trust of India (SUUTI) had sold over 9 per cent or almost half of its stake in Axis Bank for around Rs 5,557.2 crore ($912 million).
LIC had picked shares worth Rs 1,116 crore then and joined SUUTI to become the single-largest shareholder of Axis Bank with around 11 per cent stake each.
The offer for sale of IOC was conducted on Monday, when the benchmark stock market indices lost almost 6 per cent in a day in a blood bath that reflected a global share sell-off.