Daijiworld Media Network – New Delhi

New Delhi, Aug 6: The Central government has raised around Rs 31,552 crore ($3.3 billion) through the sale of shares in Life Insurance Corporation of India (LIC), completing what is being described as India’s biggest secondary share sale on the stock exchange.

According to a Bloomberg report, the government initially planned to divest a smaller stake but more than doubled the size of the offer after receiving strong demand from institutional investors.

The Centre had launched the two-day Offer for Sale (OFS) on August 4 to sell up to a 6.5 per cent stake in LIC at a floor price of Rs 382 per share.

To prevent speculation and pressure on LIC’s share price, officials in the Department of Investment and Public Asset Management (DIPAM) reportedly kept the timing of the transaction confidential until the final hours. Even some of the investment banks advising on the deal were informed only after the markets had closed.

The report also stated that the four investment banks associated with the transaction did not charge advisory fees, a practice sometimes seen in government disinvestment deals where firms seek future business opportunities and market recognition.

Market participants had expected the share sale to begin after LIC announced its quarterly earnings. However, the government reportedly advanced the transaction to stay ahead of market expectations and minimise the possibility of speculative trading.

Strong institutional demand led the government to expand the offering. The institutional portion of the OFS was subscribed 3.32 times, prompting the Centre to exercise the oversubscription option. The retail portion closed with a subscription of 69 per cent, taking the overall issue subscription to 1.2 times.

Following the stake sale, LIC's public shareholding will rise to 10 per cent, enabling the insurer to comply with the Securities and Exchange Board of India's (SEBI) minimum public shareholding norms well ahead of the May 2027 deadline.