Govt to again sell stake in LIC:Common man to get ₹15 discount on every share; find key details inside

The Central Government is going to sell up to 6.5% stake in LIC through Offer for Sale. The government has set a floor price of ₹382 per share for this sale. The main objective of this OFS is to meet SEBI’s minimum public shareholding norms before the May 2027 deadline. Government will sell a total of 41.11 crore shares According to an exchange filing by LIC, this offer will begin with a base sale of 2% equity stake. Under this, the President of India will sell 12.65 crore shares through the Ministry of Finance. The government will also have an oversubscription option to sell an additional 4.5% stake, i.e., 28.46 crore shares. If the oversubscription option is fully utilized, the total offer size will increase to 41.11 crore shares (6.5% stake). According to a Reuters report, the sale of the entire 6.5% stake at the floor price will fetch the government approximately ₹31,410 crore. Why is the government selling the stake? The primary objective of the OFS is to help LIC comply with SEBI’s Minimum Public Shareholding (MPS) regulations. DIPAM Secretary Arunish Chawla posted on social media platform X, saying, “This OFS will help achieve the MPS target ahead of the scheduled time.” Currently, public shareholding in LIC is approximately 3.5%. If the government sells the entire 6.5% stake, the insurance company’s public shareholding will increase to 10%. This will enable LIC to meet the regulatory requirement well before the May 2027 deadline. First Stake Sale After IPO LIC was listed on stock exchanges in May 2022, when the government sold a 3.5% stake through the country’s largest IPO. This is the government’s first stake sale in the insurance company after that listing. When Will OFS Open and Bidding Rules According to exchange filings, the OFS opened for non-retail i.e. institutional investors on Tuesday, August 4. Retail investors and eligible employees will be able to place their bids on Wednesday, August 5. Non-retail investors whose bids do not receive allotment on the first day can carry forward or modify their bids on the second day as per SEBI regulations. Comparison of Floor Price and Market Price The government has set a floor price of ₹382 per share for the OFS. At the end of trading on Monday, LIC’s share closed at ₹428.50, up 0.9%. This means the fixed floor price is approximately 11% lower than Monday’s closing price. ₹15 Discount for Retail Investors and Employees Retail investors and eligible employees participating in the OFS will be given a discount of ₹15 per share on the final price determined. Key Points of Allotment Under Regulations: Knowledge Box: