LIC disinvestment process to be initiated in the next two weeks, sources say

The government is likely to initiate the disinvestment process for selling a minority stake in India’s largest insurer, Life Insurance Corporation of India (LIC) as soon as the next two weeks, sources with knowledge of the matter told CNBC-TV18.Sources added further that the government could look to divest between 2.5% or 3% of its total equity in LIC, through an Offer For Sale (OFS) process, through which it could look to garner between ₹14,000 crore and ₹17,000 crore.

This move could mark the beginning of the first tranche of what can turn out to be a multi-stage stake sale process aimed at meeting regulatory requirements.

According to sources, Motilal Oswal and IDBI Capital have been appointed as merchant bankers to manage the OFS process.
The Government is likely to undertake investor roadshows in the next two weeks to gauge interest and finalize pricing for the LIC’s OFS, sources said, adding that the final decisions on the quantum of the tranche and its pricing are expected only after feedback from the investors post these roadshows.At the end of the June quarter, the government held a 96.5% stake in LIC, having divested 3.5% of its total equity back in May 2022 at the time of its IPO.

SEBI has granted LIC a three-year extension to meet the minimum 10% public shareholding requirement, thereby pushing the deadline to meet the 10% minimum public shareholding requirements to May 16, 2027.

CNBC-TV18 has written to Department of Investment and Public Asset Management (DIPAM) and LIC. A response from both parties is still awaited.

Shares of LIC have slumped to the lows of the day, currently trading 4% lower at ₹882.3. The stock trades below its IPO price of ₹949 and its retail allotment rate of ₹904.