Government to Sell Up to 6.5% Stake in LIC; Floor Price and Retail Bidding Details Released as Shares Drop 9%

The Indian government has initiated a sale of up to 6.5% of its stake in the Life Insurance Corporation of India (LIC), aiming to generate approximately ₹31,000 crore (around $3.3 billion) as part of its disinvestment strategy. The floor price for the shares has been set at ₹382 per share, reflecting a 10% discount compared to LIC’s current market value.

On the first day of the offer for sale (OFS), shares of LIC experienced a decline of nearly 9%, indicating some market volatility surrounding the government’s divestiture. The OFS is targeted at both institutional and retail investors, with the retail bidding aspect allowing individual investors to participate in this capital raise.

The disinvestment program highlights the government’s efforts to reduce public sector liabilities and attract private investment into the economy. LIC, which is Indias largest life insurer, has been a crucial player in the financial services sector since its establishment in 1956.

Analysts suggest that the successful completion of this sale could enhance liquidity within the markets and foster greater participation from foreign and domestic investors in state-owned firms. As part of broader economic reforms, the government aims to deepen financial markets and support infrastructure development projects through such fund-raising initiatives.

The uptake of this stake sale will be monitored closely in the coming days, and its impact on both LICs performance and the broader market will be of interest to investors and policymakers alike.