The central government is considering selling its 2 to 3 percent stake in Jeevan Insurance Corporation (LIC) during 2025-26. According to media reports, the government can do in many small installments rather than a single offer during the coming financial year, which will depend on market conditions as the central government wants to maximize the value of its share in the insurance company.
The Department of Investment and Public Property Management (DIPAM) of the Ministry of Finance had already consulted merchant bankers and legal advisors to assist the sale of minority share in financial institutions including public sector banks and LIC as part of the dishonor scheme to be implemented in the next three years.
The state -run insurance giants had earlier stated that he had received three years from the market regulator SEBI to follow the minimum public shareholding criteria, which has led to the revised time limit for LIC to achieve 10% public shareholding by May 16, 2027. Disinvestment was required because according to SEBI rules, all listid companies are required to maintain 25% public float.
However, new listid companies are given three years to comply with this requirement. For companies whose post issue market capitalization is more than one lakh crore rupees, 25% minimum public shareholding (MPS) rule has been extended to five years. In May 2022, the government sold 3.5% stake in LIC via IPO, which was fully organized as a proposal for sale (OFS), raising around Rs 21,000 crore.
In the last 1 year, LIC shares have declined by 23.29%, while the year-to-year performance has seen a decline of 15.61%. In the last 6 months, the price has declined by 26.66% and has seen a decline of 18.60% in 3 months. Apart from this, in the last 1 month the price has declined by 3.37%.
