Govt raised Rs 31,552 crore via LIC OFS; shares trade lower
New Delhi, Aug 6
Shares of Life Insurance Corporation of India traded lower on Thursday after the government raised Rs 31,552 crore through the Offer for Sale by fully exercising the green shoe option and enabling the state-run insurer to achieve the mandatory 10 per cent minimum public shareholding ahead of the regulatory deadline.
The Department of Investment and Public Asset Management (DIPAM) has stated that the OFS was oversubscribed on both days of bidding with 82.23 crore shares allocated to retail and institutional investors.
Taking to the social media platform X, DIPAM said that OFS in the Life Insurance Corporation of India (LIC) closed with an overwhelming response from both retail and institutional investors.
"With this the public ownership of LIC has increased to 10 per cent and it has achieved this critical milestone ahead of schedule. A total of 82,23,33,558 shares have been allocated for an amount of Rs 31,552 crore, making it India's largest public offering ever, it added.
In addition, the transaction is the largest public offering in India's capital markets in terms of issue size.
The government had initially offered to sell a 2.5 per cent stake in LIC along with a green shoe option of up to 4 per cent in the event of strong investor demand.
Moreover, the floor price for the OFS was fixed at Rs 382 per share.
Strong demand from investors enabled the government to fully exercise the green shoe option and increased the size of the offer and raising public shareholding in LIC to 10 per cent, in compliance with the minimum public shareholding norms.
The OFS opened for non-retail investors on August 4, while retail investors bid on Wednesday.
Additionally, DIPAM thanked investors for their participation, saying the strong response reflected confidence in LIC and the government's disinvestment programme in a post on X.
LIC, India's largest life insurer, was listed on the stock exchanges in May 2022 after the government diluted a part of its stake through an initial public offering. The latest OFS further reduces the Centre's holding while bringing the insurer in line with the Securities and Exchange Board of India's minimum public shareholding requirement.
Shares of LIC were trading lower at Rs 387.25 -- a decrease of over 1 per cent -- hitting an intraday low on Thursday in early trade on the NSE
— IANS
Reader Comments
Rs 31,552 crore raised through LIC OFS is indeed a big achievement for the government. But let's not forget, this is just disinvestment - the government is selling its stake to meet fiscal targets. The real question is: Are they using this money wisely for infrastructure and social welfare? The common taxpayer deserves transparency on how these funds will be utilised.
Impressive response from investors, but does this actually benefit the Indian economy in the long run? LIC is a strategic asset for India, and increasing public shareholding dilutes government control. While it meets regulatory requirements, one has to question whether this is the right time to sell stake in a company that is the backbone of India's life insurance sector.
Full exercise of green shoe option shows strong demand, but LIC shares trading lower is disappointing. As a policyholder and small investor, I think LIC's fundamentals are solid. The market is just reacting to short-term factors. Let's be patient - LIC has always been about long-term value, not quick gains. 💪
It's good to see LIC meeting the MPS norms ahead of schedule. But I'm more curious about the retail investor participation. With 82 crore shares allocated, were retail investors given fair allocation? Sometimes big institutional players dominate these OFSs. We need more retail participation in India's capital markets.
The OFS being oversubscribed is a positive signal for India's capital markets. This shows confidence from both domestic and foreign investors in the Indian economy. However, watching LIC shares fall post-success is a bit concerning. Might be a good
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