3 weeks ago
LIC stake sale nets Rs 31,552 crore, India's largest ever
The government of India owns a very big life insurance company called LIC.
It decided to sell a small part of its ownership to people and companies.
This kind of sale is called an offer for sale.
Many big investors wanted to buy these shares.
In fact, so many people wanted to buy that the government could use its extra option to sell more.
The government raised about Rs 31,552 crore from the sale, which is the biggest amount ever raised in an Indian share offering.
Regular people could also buy shares, but fewer of them bought than the government hoped.
The sale also helped LIC follow a rule that the public must own at least 10% of the company.
The government plans to sell more shares in the future to raise more money.
The Centre concluded a two-day offer for sale of a 6.5% stake in Life Insurance Corporation (LIC), raising around Rs 31,552 crore, India's largest public offering ever.
The OFS received bids for 113.16 crore shares against the offer size of 82.22 crore shares including the greenshoe option, an overall subscription of 1.38 times.
The institutional portion was subscribed 1.45 times, while the retail portion attracted a subscription of 0.7 times.
The stake sale lifted LIC's public shareholding to 10%, meeting the Securities and Exchange Board of India (Sebi) requirement ahead of the May 16, 2027 deadline.
Disinvestment so far this financial year totals about Rs 52,700 crore, the highest since FY19, against an FY27 target of around Rs 80,000 crore.
- Who
- The Government of India (the Centre) through the Department of Investment and Public Asset Management (DIPAM), Life Insurance Corporation (LIC), and institutional and retail investors.
- What
- The government concluded a two-day offer for sale of a 6.5% stake in LIC, raising around Rs 31,552 crore, India's largest public offering ever.
- Where
- India, with LIC shares trading on the National Stock Exchange (NSE).
- When
- The two-day OFS concluded on Wednesday in the current financial year, with LIC shares trading down over 1% on Thursday.
- Why
- To boost the Centre's disinvestment receipts amid fiscal pressures and to help LIC meet Sebi's 10% minimum public shareholding requirement ahead of the May 16, 2027 deadline.
Key facts
- Stake sold
- 6.5% in Life Insurance Corporation (LIC)
- Amount raised
- Around Rs 31,552 crore
- Overall subscription
- 1.38 times (113.16 crore shares bid vs 82.22 crore offered)
- Institutional subscription
- 1.45 times
- Retail subscription
- 0.7 times
- Floor price
- Rs 382 per share
- Disinvestment so far this FY
- About Rs 52,700 crore, highest since FY19
- FY27 disinvestment target
- Around Rs 80,000 crore
Quotes
Government officials
Representatives of the Indian government involved in the LIC stake sale
“the two-day OFS closed with bids for 113.16 crore shares against the offer size of 82.22 crore shares”
financialexpress.com
Sources
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