Government Share in LIC: The government is preparing to sell some of its stake in the Life Insurance Corporation of India (LIC). According to sources, the government is planning to sell a minority stake in LIC through Offer for Sale (OFS).
Government Share in LIC: The country’s largest insurance company – Life Insurance Corporation of India (LIC) – is once again in the headlines. According to sources, the central government is now preparing to sell more of its stake in LIC. This step is considered important in the direction of deinvestment target and increasing public shareholding in the market. Currently, the government holds 96.5 percent stake in LIC. In May 2022, the government brought the first IPO of LIC, in which about ₹ 21,000 crore was raised by selling 3.5% stake. At that time the share price was fixed at ₹ 902 to ₹ 949 per share.
Government may bring OFS
If sources are to be believed, the government is now planning to sell a minority stake in LIC through Offer for Sale (OFS). However, the process is still in the initial stages and the Department of Investment and Public Asset Management (DIPAM) will prepare its strategy after looking at the market situation. A senior official said that it has not yet been decided how much percentage of stake will be sold and at what price, but the process is moving forward.
The government has to sell about 6.5 percent stake
According to SEBI rules, any listed company should have at least 10% public shareholding. Since the public currently holds only 3.5% shares in LIC, the government will have to sell at least 6.5% additional stake by May 2027. Therefore, this stake sale is not only a means of increasing the government’s revenue, but is also a necessary step to comply with SEBI standards.
Performance of LIC Stocks
The current market capitalization of LIC is Rs 5.85 lakh crore. LIC shares were trading at Rs 924.40 per share on BSE, down 2.27 per cent from its previous close.
If the government sells its stake again, it will increase the liquidity of the stock. However, before investing, investors will need to look at the market movement, share valuation and OFS price.
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