Government Raises ₹31,552 Crore as LIC Offer for Sale Sees Massive Investor Response

The Government of India has successfully raised ₹31,552 crore through the Offer for Sale (OFS) of LIC shares, marking one of the biggest milestones in the country's disinvestment programme. Institutional and retail investors poured in heavily on the issue and the government had to exercise its full green shoe option.

According to the Department of Investment and Public Asset Management (DIPAM), LIC OFS was oversubscribed on both days of the offering. So the government allocated 82.23 crore shares, making it India's biggest public offering in terms of funds raised.

The successful completion of the OFS has raised LIC's public shareholding to 10%, which makes LIC able to meet the minimum public shareholding (MPS) requirement well ahead of the regulatory deadline. This will make the stock more liquid and more institutional.

The government had initially offered a 2.5% stake in LIC with an additional 4% green shoe option, taking the total offer size to 6.5%. The floor price of the issue was fixed at ₹382 per share with a high demand from different investors. After the overwhelming subscription, the government exercised the entire green shoe option and maximized the value of the sale.

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What is LIC OFS? Meaning, Benefits and What It Means for Retail Investors

The OFS was first for non-retail institutional investors before being open to retail investors. Strong participation from both segments indicated investor confidence in LIC's long-term growth prospects despite short-term volatility in the stock price during the offer period.

Following the completion of the share sale, LIC shares closed at ₹393 on the NSE, up a little on the day. Market experts believe the successful OFS strengthens the government's FY27 disinvestment programme while broadening public ownership in India's largest life insurer.

The transaction is also an important step in the Centre's broader strategy which will allow it to meet the disinvestment targets, develop market depth and comply with SEBI listing rules. LIC will also benefit from greater liquidity and a deeper pool of domestic as well as foreign investors as LIC is now in the public shareholding phase, which has been achieved well ahead of schedule.