The Government of India is set to sell up to a 6.5% stake in Life Insurance Corporation of India (LIC) through a two-day Offer for Sale (OFS). The government has fixed the floor price at ₹382 per share, offering investors an opportunity to buy LIC shares at a significant discount.
Following the announcement, LIC share price declined sharply in early trading. Around 9:30 AM, LIC shares were trading at ₹398.60, down 6.07%.
LIC OFS 2026: Government to Sell Up to 6.5% Stake
The government plans to sell more than 82.22 crore LIC shares, representing up to a 6.5% stake in the country's largest life insurer.
The stake sale includes:
Base Offer: 2.5% government stake
Green-shoe Option: Additional 4%
Total Possible Stake Sale: 6.5%
OFS Floor Price: ₹382 per share
Total Shares: Over 82.22 crore
Expected Proceeds: Around ₹31,000 crore if fully subscribed
The government has kept the additional 4% portion as a green-shoe option, which can be exercised if demand exceeds the base offer.
When Will LIC OFS Open?
The LIC OFS will be conducted over two trading sessions.
Tuesday: OFS opens for non-retail investors
Wednesday: Retail investors can participate
Investors should check the applicable exchange and broker instructions for the exact bidding process and eligibility requirements.
LIC OFS Offers 10% Discount
The government's OFS floor price of ₹382 represents approximately a 10% discount to LIC's previous BSE closing price of ₹424.35.
This discount has become a major attraction for investors considering participation in the stake sale.
However, investors should remember that an OFS discount does not guarantee profits, as the market price can fluctuate after the share sale.
Why Is the Government Selling LIC Shares?
The stake sale is aimed at helping LIC meet the minimum public shareholding requirement within the stipulated timeline.
SEBI had provided LIC with time until May 16, 2027, to achieve the required minimum public shareholding of 10%.
The government currently holds approximately 96.5% of LIC, making the OFS an important step toward increasing the company's public shareholding.
How Much Money Can the Government Raise?
If the entire 6.5% stake is subscribed at the OFS floor price of ₹382, the government could raise approximately ₹31,000 crore.
The actual amount raised will depend on investor demand and the final number of shares sold.
LIC Share Price Today
The announcement triggered significant selling pressure in LIC shares.
Around 9:30 AM, the stock was trading at:
LIC Share Price: ₹398.60
Decline: 6.07%
Previous BSE Close: ₹424.35
OFS Floor Price: ₹382
The gap between the market price and OFS floor price is likely to remain a key factor for investors during the sale period.
LIC OFS 2026: Key Details at a Glance
Particular Details
Company Life Insurance Corporation of India
Offer Type Offer for Sale (OFS)
Government Stake Offered Up to 6.5%
Base Offer 2.5%
Green-shoe Option 4%
Shares Offered Over 82.22 crore
OFS Floor Price ₹382
Discount Around 10%
Potential Proceeds Around ₹31,000 crore
Non-Retail Bidding Tuesday
Retail Bidding Wednesday
Government's Current Stake 96.5%
Minimum Public Shareholding Deadline May 16, 2027
What Does the LIC OFS Mean for Investors?
The 10% discount compared with LIC's previous closing price makes the OFS an important event for investors tracking the stock. At the same time, the sharp decline in LIC shares shows that the market is adjusting to the potential increase in public shareholding.
Investors should consider the company's fundamentals, valuation, future growth prospects and the possible impact of increased share supply before making an investment decision.
Key Takeaways
Government will sell up to 6.5% stake in LIC.
OFS floor price has been fixed at ₹382 per share.
Investors get an approximately 10% discount to the previous BSE closing price.
LIC shares fell more than 6% in early trading.
The base offer is 2.5%, with an additional 4% green-shoe option.
Government could raise around ₹31,000 crore if the full offer is subscribed.
The sale will help LIC meet the 10% minimum public shareholding requirement ahead of the deadline.
The LIC OFS is one of the government's major stake-sale exercises and could significantly increase the company's public float. Investors should closely monitor the OFS subscription response and LIC's share price movement during and after the offer.
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