Govt raises Rs 31,552 crore through LIC share sale; public holding reaches 10%

The Centre has raised Rs 31,552 crore through the Offer for Sale (OFS) of its stake in Life Insurance Corporation of India (LIC), fully exercising the green shoe option after strong investor demand and enabling the insurer to achieve the mandatory 10 per cent public shareholding requirement ahead of schedule.

The Department of Investment and Public Asset Management (DIPAM) said the issue was oversubscribed on both bidding days, with more than 82.23 crore shares allocated to retail and institutional investors.

Announcing the outcome on social media platform X, DIPAM said the successful transaction increased LIC's public shareholding to 10 per cent, bringing the state-owned insurer into compliance with the Securities and Exchange Board of India's minimum public shareholding norms before the regulatory deadline.

According to the department, a total of 82,23,33,558 shares were allotted under the OFS, making it India's largest public offering in terms of issue size.

The government had initially proposed to sell a 2.5 per cent stake in LIC, with an additional green shoe option of up to 4 per cent to accommodate stronger-than-expected demand. The floor price for the issue was fixed at Rs 382 per share.

Robust participation from institutional and retail investors enabled the government to fully utilise the green shoe option, increasing both the size of the issue and the level of public ownership in the insurer.

The OFS opened for institutional investors on 4 August, followed by the retail bidding window on 5 August.

DIPAM thanked investors for their participation, stating that the response reflected continued confidence in both LIC and the government's disinvestment programme.

LIC, India's largest life insurer, was listed on the stock exchanges in May 2022 following its initial public offering, through which the government diluted part of its holding. The latest share sale further reduces the Centre's stake while ensuring compliance with market regulations.

Despite the successful completion of the OFS, LIC shares traded lower in early trade on Thursday. The stock slipped more than one per cent to an intraday low of Rs 387.25 on the National Stock Exchange.

With IANS inputs