Centre plans to sell a 6.5% stake in LIC in multiple tranches over next 2 years: Report

Life Insurance Corporation of India

The government is planning to sell a 6.5 percent stake in Life Insurance Corporation (LIC) of India in multiple small tranches over the next two years, a Business Standard report said on Monday. This move is part of a broader effort to launch a series of share sales in central public-sector enterprises (CPSEs) during the current financial year, aimed at complying with the stock market regulator’s minimum public shareholding (MPS) requirements.

“We will adopt a strategy of regular, small offers for sale (OFS) throughout the year, providing advance notice so that small investors can prepare accordingly,” said Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (Dipam), told the Business Standard in an interview.

While most CPSEs have now met the MPS mandate, which requires at least 25 percent public shareholding for listed companies, some entities, particularly in defence, railways, and the financial sector, still fall short. Chawla emphasised that efforts are underway to accelerate disinvestment in these lagging sectors, with the aim of achieving full compliance within the next year.

Public-sector banks such as Bank of Maharashtra and UCO Bank have a deadline of August 2026 to meet the 25 percent public shareholding norm. Meanwhile, the Securities and Exchange Board of India (SEBI) has allowed LIC to increase its public shareholding to 10 percent by May 16, 2027. LIC was publicly listed in May 2022, with the government divesting an initial 3.5 percent stake.

Chawla explained that the sale of LIC shares will be conducted in small portions to accommodate market liquidity and ensure that small investors have a fair opportunity to participate. Based on the current market price, selling a 6.5 percent stake in LIC could generate approximately Rs 35,256 crore for the government.