Government Plans Minority Stake Sale in LIC, OFS Route Likely

The Central government is preparing to sell a further minority stake in Life Insurance Corporation (LIC), India’s largest insurer, as part of its ongoing disinvestment strategy, according to sources familiar with the development.

Currently, the government holds a 96.5% stake in LIC, having sold 3.5% via an initial public offering (IPO) in May 2022. That IPO, the largest in India’s history at the time, raised approximately Rs 21,000 crore at a price band of Rs 902–949 per share.

According to sources, the Department of Investment and Public Asset Management (DIPAM) has been tasked with working out the finer details of the upcoming stake sale, which is likely to be executed through the Offer for Sale (OFS) route. The transaction is still at an early stage, with specifics regarding timing, quantum, and pricing yet to be finalized.

“The government has given an in-principle nod to proceed with the share sale in LIC. DIPAM is working on the modalities, and discussions are ongoing,” one of the sources said.

The planned disinvestment is part of the government’s broader strategy to raise funds by monetizing select public sector undertakings. The move is expected to enhance public float and improve transparency and governance at LIC, which was listed on the stock exchanges in 2022.

Market experts believe the sale could attract significant investor interest, especially given LIC’s strong brand value and dominant position in the insurance sector, though its stock performance post-IPO has remained under scrutiny.

The Centre is aiming to meet its disinvestment target for the financial year, and the LIC stake sale could play a key role in bridging the gap in its revenue projections.