Centre plans staggered LIC stake sale to meet 10% shareholding norm by 2027: Report

LIC’s market value has seen a significant decline since its listing, plunging from Rs 5.5 trillion in May 2022 to its current levels.

The Centre is reportedly considering divesting 2-3 percent of its stake in Life Insurance Corporation (LIC) in fiscal 2025-26, in a bid to meet the 10 percent public shareholding norm by May 2027.

This stake sale will likely be executed in multiple small tranches instead of a single large offering, ensuring optimal value realisation and minimising market disruption, according to sources cited in a Mint report. The plan hinges on favourable market conditions, and as per officials cited in the report, the Centre will likely defer or modify its approach if needed.

Moneycontrol could not independently verify the report at the time of publishing.

The Central government currently holds a 96.5 percent stake in LIC, following the company’s Rs 21,000 crore IPO in May 2022, which involved selling 3.5 percent equity to the public. At present, a 2-3 percent divestment has the potential to raise Rs 9,500 crore to Rs 14,500 crore, based on LIC’s current market capitalisation of approximately Rs 4.8 trillion.

The Securities and Exchange Board of India (SEBI) had initially mandated LIC to meet the 10 percent minimum public shareholding rule by May 2024, states the report by Mint. The deadline was, however, extended until May 16, 2027, providing the government additional time to execute the divestment strategically.

LIC’s market value has seen a significant decline since its listing, plunging from Rs 5.5 trillion in May 2022 to its current levels. Tepid investor sentiment and external market headwinds have further hit LIC’s stock, which was trading at Rs 754.10 on the BSE on Tuesday.