The government has opened a two-day OFS to sell up to 6.5% of its stake in LIC, aiming to raise around ₹31,400 crore for the exchequer.

The sale is structured in two parts. There’s a base offer covering 2.5% of LIC’s equity, plus an additional 4% green shoe option that kicks in if investor demand runs higher than expected.

The total number of shares on the table is more than 82 crore. The OFS’s floor price is ₹382 per share.

Non retail investors can place their bids on Tuesday, August 4, while retail investors get their turn the next day, on Wednesday, August 5.

According to DIPAM, the government body handling the sale, this move is meant to help LIC meet SEBI’s minimum public shareholding requirement well before its deadline.

Market regulator SEBI had earlier given LIC until May 2027 to bring public ownership up to at least 10%.

Right now, the government still holds a commanding 96.5% stake in the company, so this sale is really about widening public ownership rather than giving up control.

This isn’t the government’s first move to trim its LIC holding. Back in May 2022, it had already sold a 3.5% stake through LIC’s initial public offering, which brought in around ₹21,000 crore at the time.

The timing is worth noting too. This stake sale comes right after LIC issued bonus shares to existing shareholders in a 1:1 ratio, a move that effectively brought down the per share price and made the stock more accessible to a wider set of investors bidding in this OFS.

Beyond LIC, the government has already raised over ₹21,000 crore this fiscal year through similar stake sales across seven other public sector companies, as part of its broader disinvestment programme for the year.

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