Backed by strong institutional demand, the Centre on Wednesday successfully concluded the offer for sale (OFS) of a 6.5% stake in Life Insurance Corporation (LIC), raising around Rs 31,552 crore, making it India’s largest public offering ever.
With the LIC OFS, the government has mobilised about Rs 52,700 crore through disinvestment so far in the current financial year, the highest since FY19.
“The two-day OFS closed with bids for 113.16 crore shares against the offer size of 82.22 crore shares, including the greenshoe option, resulting in an overall subscription of 1.38 times.
The institutional portion was subscribed 1.45 times, receiving bids for 107.4 crore shares against an offer of 74 crore shares. The retail portion attracted bids for 5.76 crore shares against 8.22 crore shares, translating into a subscription of 0.7 times.
The latest stake sale also enabled LIC to meet the Securities and Exchange Board of India (Sebi) requirement of achieving 10% public shareholding by May 16, 2027, ahead of schedule.
The government had listed LIC in May 2022 by selling a 3.5% stake, raising Rs 20,516 crore. It plans to gradually increase the insurer’s public float to meet the 25% minimum public shareholding requirement.
The OFS followed LIC’s recent 1:1 bonus share issue, which lowered the effective per-share price and made the offer more affordable for a wider pool of investors. The proceeds will provide a boost to the Centre’s disinvestment receipts.
The government has set a target of raising around Rs 80,000 crore in FY27 through stake sales in public sector enterprises and other companies where it holds minority stakes. These non-tax revenues are particularly important this year amid fiscal pressures, including the potential increase in the fertiliser subsidy bill due to the US-Iran war.