LIC OFS opens on August 4 as govt looks to sell up to 6.5% stake. Check details

The government will open an offer for sale in Life Insurance Corp (LIC) on Tuesday for non-retail investors, as it moves to reduce its stake in the country’s largest insurer and meet minimum public shareholding milestones ahead of schedule. Retail investors will be able to bid on Wednesday.

The government plans to sell 2.5% equity in LIC, with an additional 4% available as a green shoe option. If fully subscribed, the offer could lead to a total stake sale of up to 6.5%.

The floor price for the OFS has been fixed at Rs 382 per share. The sale is part of the government’s plan to increase public shareholding in LIC after the insurer’s listing. LIC remains one of the largest government-owned listed companies, and the public float has to be gradually increased to comply with minimum public shareholding requirements.

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Non-retail bidding first

The OFS will open first for non-retail investors on Tuesday. This category usually includes institutional investors and high-net-worth investors. Retail investors will get their turn on Wednesday. Under the OFS process, retail investors can place bids separately, usually with a portion reserved for them.

The floor price of Rs 382 per share will act as the minimum price at which investors can bid. Bids below this price will not be accepted. The final sale price will depend on investor demand during the OFS window.”The Life Insurance Corporation of India (LIC) is a cornerstone of the nation’s financial sector, serving as India’s largest life insurer and the country’s second-largest public sector enterprise by market capitalization. Its institutional eminence is recognized both domestically and globally, with LIC ranked as the fourth most valuable brand in India and the world’s third-strongest insurance brand. Furthermore, LIC’s exceptional operational scale and market penetration are exemplified by its Guinness World Record for the most life insurance policies sold within a 24-hour period, reflecting unwavering public trust and unmatched execution capabilities,” DIPAM secretary Arunish Chawla said.

The base issue size is 2.5% of LIC’s equity. The government has also kept an additional 4% as a green shoe option. A green shoe option allows the seller to sell more shares if demand is strong. In this case, if investors show enough interest, the government can sell more than the base 2.5% stake.

LIC is a largecap public sector financial company with a wide retail investor base, and any stake sale in the company is closely tracked by investors.

The stake sale is expected to help LIC move faster toward minimum public shareholding milestones. Listed companies are required to maintain a minimum level of public shareholding. Since LIC was listed with the government holding a large majority stake, the public float has to rise over time.