The Centre on Tuesday exercised the greenshoe option to sell a 6.5% stake in Life Insurance Corporation (LIC) after institutional investors put in bids worth more than Rs 36,000 crore on the first day of the offer for sale (OFS), paving the way for the government to raise about Rs 31,000 crore.
The OFS comprises a base issue of 2.5% and a greenshoe option for an additional 4% stake. The offer opens for retail investors on Wednesday.
“Offer for Sale in the LIC received an overwhelming response from institutional investors and was oversubscribed 3.32 times its base size,” the department of investment and public asset management (Dipam) said in a post on ‘X’. “In view of the exceptional demand, the Government has decided to exercise the green shoe option.”
Institutional investors bid for more than 94.45 crore shares at an indicative price of Rs 383.84 apiece on Tuesday, taking the total value of bids to about Rs 36,255 crore.
Shares of LIC ended 7.86% lower at Rs 391 on the BSE on Tuesday.
The government listed LIC in May 2022 after diluting a 3.5% stake, which fetched Rs 20,516 crore. In May 2024, market regulator Sebi granted LIC a three-year extension, until May 16, 2027, to achieve the minimum public shareholding of 10%. The government ultimately plans to gradually increase the public float to meet the 25% minimum public shareholding norm.