The authorities could potentially offload a 2.5-3% ownership in LIC, with the potential funds generated reaching up to Rs 17,000 crore, according to a report.
The Indian government is set to initiate the sale of its stake in Life Insurance Corporation of India (LIC) within the next two weeks from mid-August 2025. This sale is part of the government's broader disinvestment plan and is expected to generate around ₹14,000 crore to ₹17,000 crore in revenue.
Currently, the government holds 96.5% of LIC, with only 3.5% publicly held. To meet the requirements set by the Market Regulator SEBI, LIC is directed to increase its public shareholding to 10% by May 16, 2027. This planned stake sale is a significant step towards achieving this goal.
The government will conduct investor roadshows over about two weeks to finalize the share quantity and pricing before launching the Offer for Sale (OFS). Merchant bankers for the transaction are expected to be Motilal Oswal and IDBI Capital.
The initial sale will involve the offloading of 2.5% to 3% of LIC equity. This first step is the beginning of a phased divestment plan, with the government aiming to reduce its holding to 90% by 2027, implying further stake sales beyond the first tranche. However, the exact timeline and tranche sizes for subsequent sales remain unspecified.
According to SEBI guidelines, LIC needs to increase its public shareholding to a minimum of 10%. The government's decision to offload its stake in LIC is in compliance with these guidelines.
It's important to note that the report does not specify the expected price range for the sale of the stake in LIC or mention any specific reasons for the government's decision to sell its stake. Additionally, SEBI has not specified a timeline for the completion of the disinvestment process.
In summary:
- Stake sale launch: Within two weeks from mid-August 2025
- First tranche size: 2.5% to 3% of LIC equity
- Expected proceeds: ₹14,000 crore to ₹17,000 crore
- Current government stake: 96.5%
- SEBI public shareholding norm target: 10% by May 16, 2027
- Merchant bankers: Motilal Oswal and IDBI Capital
- Longer-term plan: Reduce stake to 90% by 2027 via tranches
These details reflect the most recent information as of August 2025, consistent across multiple news sources and official disclosures.
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