LIC shares fall nearly 9% as govt launches OFS at ₹382 floor price

The government has offered to sell a 2.5 per cent stake, with an additional 4 per cent greenshoe option, as it seeks to increase LIC's public shareholding

Shares of state-owned Life Insurance Corporation of India (LIC) fell sharply on Tuesday after the government launched an offer for sale (OFS) to reduce its stake in the insurer, with the floor price set at a discount to the previous closing price.

 

The floor price was set at ₹382, a 10.8 per cent discount to Monday’s closing price of ₹428.50 on the National Stock Exchange (NSE). On Tuesday, the shares fell nearly 8.9 per cent to an intraday low of ₹390.50, before recovering marginally to trade at around ₹396.70. At that price, LIC had a market capitalisation of around ₹5.02 trillion.

 

 

The government on Monday announced an OFS comprising a base offer of 2.5 per cent of LIC’s paid-up equity, along with a greenshoe option to sell an additional 4 per cent.

 

“The Offer for Sale in LIC opens tomorrow for non-retail investors. Retail investors can bid on Wednesday. Government offers to disinvest 2.5 per cent equity with an additional 4 per cent as a green shoe option. Floor price has been fixed at ₹382 per share. This will help achieve minimum public shareholding (MPS) milestones ahead of schedule,” Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said in a post on X on Monday.

 

The stake sale is part of the government’s plan to increase the public float in LIC and move the insurer closer to meeting minimum public shareholding norms. The government remains the majority shareholder in the country’s largest life insurer following its initial public offering in 2022. It held a 96.5 per cent stake as of June 30, 2026.