Life Insurance Corporation of India (LIC) shares dropped 8.28% on the NSE on August 4 after the government launched an Offer for Sale (OFS) of a 2.5% stake, with an option to sell an additional 4% through a green shoe option. LIC shares opened at ₹392, down from the previous close of ₹428.50, hitting an intraday low of ₹390.50, according to livemint.com.
The government set the floor price for the OFS at ₹382 per share, as announced by the Department of Investment and Public Asset Management (DIPAM). The sale opened for subscription to non-retail investors on August 4, triggering a sharp decline in LIC’s share price. The move is part of the government's divestment strategy to reduce its holding in LIC, the country’s largest insurer, by offloading shares to institutional investors, as reported by livemint.com.
This stake sale comes amid a broader government effort to raise funds through disinvestment in public sector enterprises. LIC’s share price decline reflects investor concerns over the discounted stake sale and its impact on valuation. The OFS is notable as LIC is a major player in India’s insurance sector, and such divestments can influence market sentiment and liquidity. The Hindu BusinessLine noted that LIC’s shares slipped to their lowest level in nearly four months following the discounted stake sale announcement.
The OFS for LIC’s stake sale officially opened on August 4, with the government offering 2.5% of its shares and an option to sell an additional 4%. The next update on the share sale progress will be available after the subscription window closes, providing clarity on investor demand and the final stake reduction.