The central government is considering selling its 2 to 3 percent stake in Life Insurance Corporation (LIC) during 2025-26. According to media reports, the government may do this in several small installments instead of 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 stake in the insurance company.

DIPAM

The Department of Investment and Public Asset Management (DIPAM) of the Finance Ministry had already consulted merchant bankers and legal advisors to assist in the sale of minority stakes in public sector banks and financial institutions including LIC as part of the disinvestment plan to be implemented in the next three years.

Got three years

The state-run insurance giant had earlier informed that it has got three years from market regulator SEBI to comply with the minimum public shareholding norms, making the revised deadline for LIC to achieve 10% public shareholding by May 16, 2027. Disinvestment was necessitated as SEBI rules require all listed companies to maintain a 25% public float.

5 years

However, newly listed companies are given three years to comply with this requirement. For companies with a post-issue market capitalization of more than Rs 1 lakh crore, the time limit to meet the 25% minimum public shareholding (MPS) rule has been extended to five years. In May 2022, the government sold a 3.5% stake in LIC through an IPO, conducted entirely as an offer for sale (OFS), raising about Rs 21,000 crore.

23.29% decline in 1 year

LIC shares have declined 23.29% in the last 1 year, while the year-to-date (YTD) performance has seen a decline of 15.61%. The price has fallen by 26.66% in the last 6 months and a decline of 18.60% has been seen in 3 months. Apart from this, the price has fallen by 3.37% in the last 1 month.

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