LIC could sell stake up to Rs 13,200 cr: What did Sebi stipulate? Know the roadmap

Kolkata: In May 2022, the Centre raised nothing less than Rs 20,557 crore by selling a 3.5% stake in behemoth LIC through an IPO, which also marked one of the biggest efforts to mop up funds from D Street. Market regulator Sebi now wants LIC to raise public shareholding to 10%. Accordingly, the government is contemplating sale of a part of its stake that could be valued between Rs 8,800 crore and Rs 13,200 crore.

Life Insurance Corporation of India shares were trading at Rs 906.55, up Rs 6.65 (or 0.74%) a few minutes after 10 am on October 29, 2025. The issue price of LIC was Rs 949.

In May 2024, capital market regulator Sebi gave LIC an extension of three years to obey a requirement for 10% float in the market. By Sebi's diktat, the insurance PSU behemoth LIC must have a 25% public shareholding by May 2032. Sebi extended the deadline for a few big companies mainly not to create an oversupply of shares at any given time.

The LIC stock has been in the public attention since the IPO. Since early July it has been below the issue price of Rs 949. The stock has generated a return of 13.22% in the past six months and (-) 3.01% in the past one year. The Department of Investment and Public Asset Management is overseeing the process of stake sale. It is now seized with the matter of deciding the timeline and volume of the stake sale. The Centre now holds a stake of 96.5%. By May 16, 2027, the government has to sell another 6.5% state, which it could do in tranches, reports say.

The decision for opting for a gradual dilution of stake could be taken to avert any sharp decline in the stock. How the deal will be completed is also under intense discussion. It could be through a qualified institutional placement (QIP) or an offer for sale (OFS). The modus operandi could be finalised with the inputs gathered during the roadshow that will be held in the next few weeks.