New Delhi: In a strategic push towards its disinvestment goals, the central government has greenlit the sale of shares in Life Insurance Corporation of India (LIC), the country’s premier state-owned insurer. The stake sale will be executed through the Offer for Sale (OFS) mechanism, a route commonly used for divesting shares in public sector enterprises.
The government, which currently holds a commanding 96.5% ownership in LIC, has not yet disclosed the exact percentage of shares it intends to offload in this round. However, officials indicate that even a minimal 1% dilution could potentially fetch up to ₹6,000 crore, given LIC’s substantial market capitalization of approximately ₹6 lakh crore.
This move is part of the broader effort to meet the disinvestment targets set for the ongoing financial year and to enhance shareholder value in the insurance giant. Sources suggest that the stake sale may be structured in phases, with a long-term objective of bringing the government’s holding closer to regulatory norms.
As per SEBI regulations, publicly listed companies are required to maintain a minimum public shareholding of 25%. In line with this, the government had earlier laid out a roadmap to reduce its stake in LIC to 75% over a two-year period. Reports indicate that the government plans to sell up to 6.5% of LIC’s shares in tranches, making this initiative a key component of its fiscal consolidation and market reform strategy.