The government is carefully evaluating the follow-on public offering (FPO) of Life Insurance Corporation (LIC) and is keen on having the “best people” to execute the stake sale, a senior finance ministry official told Business Today TV.
The official described the latest move to empanel merchant bankers and legal advisers for minority stake sales in LIC and public sector banks (PSBs) as “firm steps in the right direction.” However, he added that the timing of LIC’s stake sale would be decided based on "the right market conditions."
Dipam, the Department of Investment and Public Asset Management, has invited bids from financial and legal advisers for a three-year empanelment to assist with stake sales in LIC and select PSBs. The Centre is likely to sell a small stake in LIC to help meet the minimum public shareholding (MPS) norms set by SEBI.
Currently, LIC has a public float of just 3.5%, far below the 10% minimum required for listed firms within two years of listing. SEBI has extended the deadline until May 2027, giving the government more time to strategise its divestment.
Currently holding a 96.5 per cent stake in LIC, Sources indicate that an additional 3-5% stake sale in LIC could be the first step in 2025-2026.
In May 2022, the government raised Rs 21,000 crore through LIC’s initial public offering (IPO), the largest in India’s primary markets history. This IPO was entirely an offer-for-sale by the government, involving 221,374,920 equity shares of Rs 10 each, priced at Rs 949 per share, representing 3.5 per cent of LIC’s paid-up capital