LIC OFS: Government Raises ₹31,552 Crore, But Will It Sell More Shares?

Life Insurance Corporation of India (LIC) remained in focus after the government raised a record ₹31,552 crore through a 6.5% offer for sale (OFS). While the stake sale significantly increased LIC’s public shareholding, investors may now be wondering whether the Centre will conduct another OFS in the near term.

The government held a 96.5% stake in LIC before the latest transaction. The OFS comprised a 2.5% base offer and a 4% greenshoe option, taking the total shares offered to 82.23 crore.

Will the Government Conduct Another LIC OFS?

According to news reports, LIC CEO and MD R Doraiswamy has said the government is unlikely to undertake another public offer in the next 18-24 months. He said LIC has more time to meet the broader minimum public shareholding (MPS) requirement.

Following the latest OFS, LIC has achieved the 10% public shareholding requirement well ahead of the May 16, 2027 deadline.

The government has also received a one-time exemption allowing LIC 10 years from its May 2022 listing to reach the broader 25% public shareholding requirement. This gives the government until May 2032 to further reduce its stake.

Therefore, while another LIC OFS remains possible in the longer term, the latest management commentary suggests that an immediate follow-up stake sale is unlikely.

Why Did the Government Conduct the OFS?

The latest stake sale was primarily aimed at increasing LIC’s public float and helping it comply with SEBI’s MPS requirements.

The strong response from investors allowed the government to raise ₹31,552 crore, making the OFS India's largest public offering.

Higher public shareholding could also improve the liquidity of LIC shares and broaden the insurer’s investor base.

LIC Q1 FY27 Results Add to Investor Focus

LIC reported a 23% year-on-year rise in net profit to ₹13,492 crore in Q1 FY27. Total income increased to ₹2,37,848 crore from ₹2,22,864 crore a year earlier.

Its Value of New Business (VNB) grew by more than 61%, while the VNB margin expanded to 22.90%.

Read more: RBI Plans to Resume Urban Cooperative Bank Licenses After 22 Years, Review Rural Bank Guidelines.

Conclusion

Another LIC OFS appears unlikely in the immediate future based on management’s latest comments. With the government now having until May 2032 to meet the 25% MPS requirement, investors may have more time before another major stake sale. For now, LIC’s shareholding structure, quarterly performance and future government dilution plans will remain key factors to watch.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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