India to Sell Up to 6.5% LIC Stake in Mega Offer

The Cliff News | 4 August 2026

The Indian government has announced plans to sell up to a 6.5% stake in Life Insurance Corporation of India (LIC) through an Offer for Sale (OFS). This significant divestment aims to help the country's largest insurer comply with regulatory requirements regarding public shareholding.

The market regulator has granted LIC a deadline of May 16, 2027, to achieve a minimum 10% public shareholding. The current public float stands at 3.5%. If the full 6.5% stake is sold, LIC's public shareholding would increase to the mandated 10% mark.

Boosting Public Shareholding

This strategic offer is expected to enable LIC to meet its Minimum Public Shareholding (MPS) milestones ahead of the regulatory deadline. The divestment secretary highlighted the proactive approach to achieving these crucial targets.

LIC, a behemoth in the Indian insurance sector, had its initial public offering in May 2022. At that time, the government sold a 3.5% stake. This upcoming OFS represents the first divestment by the government since LIC’s listing.

Offer Details and Timeline

The Offer for Sale comprises a base offer of up to a 2% equity stake, with an option to divest an additional 4.5% stake. The offer will commence for non-retail investors on Tuesday and will be open to retail investors from Wednesday.

The floor price for the shares has been set at 382 rupees per share. At this floor price, the entire 6.5% stake being offered would be valued at approximately 314.1 billion rupees (around $3.29 billion).

LIC shares closed on Monday at 428.5 rupees, marking a 0.9% increase. The current market valuation suggests the sale could potentially fetch a higher figure than the floor price indicates.

Government's Divestment Push

This share sale is part of India's broader push to achieve its divestment and asset monetisation targets. The government has set an ambitious goal of 800 billion rupees for fiscal 2027, underscoring its commitment to fiscal consolidation and unlocking value from public sector undertakings.