LIC OFS draws Rs 36,400 cr institutional bids

The Government’s 6.5 per cent stake sale in LIC saw massive interest from institutional investors who put in a whopping Rs 36,400 crore worth bids — the highest-ever for any offer for sale (OFS).

Four years after its initial public offering (IPO), which had fetched Rs 21,000 crore for a 3.5 per cent stake, the government is now selling a further 6.5 per cent stake in LIC via an OFS whose size compares with the upcoming mega IPO offerings of the NSE and Reliance Jio Platforms.

The OFS comprises a base offer size of 2.5 per cent, with a greenshoe option of 4 per cent, taking the total size to 6.5 per cent, comprising 82.22 crore shares of the country’s largest insurance company.

On Tuesday, institutional investors put in bids for over 94.45 crore shares, at an indicative price of Rs 383.84/share. The bids are valued at Rs 36,400 crore at the indicative bid price.

In a regulatory filing, LIC said the government has decided to exercise the over-subscription option to the extent of about 50.60 equity shares (representing 4 per cent of the total paid-up equity share capital of the corporation).

LIC further said that 8.22 crore shares, or 10 per cent of the offer, will be available for retail investors, who can bid on Wednesday.

“A discount of Rs 10 per equity share will be given only to those retail investors and employees bidding at cut-off price,” it said.

In a post on X, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the LIC OFS was oversubscribed 3.32 times of its base size by institutional investors.

“This enthusiastic participation reflects robust investor confidence and the depth of India’s capital markets.”

On Tuesday, shares of LIC slid 7.86 per cent to close at Rs 391 on the BSE.

Its market capitalisation stands at Rs 4.95 lakh crore.

The floor price of Rs 382/share was set at a 10 per cent discount over Monday’s closing price of Rs 424.35 on the BSE.

At the floor price, the sale of over 82.22 crore shares, or a 6.5 per cent stake at the given floor price, will fetch about Rs 31,000 crore to the disinvestment kitty.

The stake sale will help LIC achieve the minimum public shareholding requirement mandated by market regulator Sebi ahead of schedule.

Sebi had given LIC time till May 16, 2027, to achieve a minimum of 10 per cent public shareholding.

At present, the government holds a 96.5 per cent stake in LIC.

It had earlier sold 3.5 per cent through an initial public offering (IPO) in May 2022 at a price band of Rs 902-949 per share, raising about Rs 21,000 crore.

In April 2026, the LIC board approved a 1:1 bonus issue.

So far in the current fiscal year, the government has mopped up Rs 21,082 crore through stake sale in seven public sector undertakings and remittances from SUUTI.