The Life Insurance Corporation of India (LIC) has opened its Offer for Sale (OFS) to retail investors today, following strong demand from non-retail investors. The government plans to sell a 2.5% equity stake with an additional 4% available as a green shoe option, at a floor price of Rs 382 per share.
The OFS, which began for non-retail investors on August 4, was oversubscribed more than three times its offer size, indicating robust interest. Retail investors can participate in the OFS today between 9.15 am and 3.30 pm through the NSE and BSE platforms. A minimum of 10% of the offer size is reserved for retail investors, who will benefit from a Rs 10 discount per share on the cut-off price.
At the effective retail price of Rs 372 per share, LIC's stock is priced at approximately 0.3x FY26 embedded value, offering a significant discount compared to private life insurers. Ajit Mishra, SVP of Research at Religare Broking, noted LIC's strengthened fundamentals, highlighting an improved FY26 VNB margin of 21.2% and a solvency ratio of 2.35x.
“While persistence remains an area to watch, the combination of compelling valuation, improving profitability and market leadership makes the OFS an attractive long-term investment opportunity.”
Ajit Mishra, SVP of Research at Religare Broking
The government currently holds a 96.5% stake in LIC, making it one of the largest government-owned listed companies. The public float must increase to meet minimum public shareholding requirements. LIC's institutional prominence is underscored by its ranking as the fourth most valuable brand in India and the third-strongest insurance brand globally.
LIC shares experienced a 9% drop on Tuesday, marking the largest single-day decline in over two years. Despite this, the stock has gained approximately 19% over three years, although it has delivered a negative return of 13% over the past year.
“The Life Insurance Corporation of India (LIC) is a cornerstone of the nation's financial sector, serving as India's largest life insurer and the country's second-largest public sector enterprise by market capitalisation.”
Arunish Chawla, DIPAM Secretary
Background
The OFS is part of the government's ongoing divestment strategy, following recent stake sales in other public sector undertakings. Investors should monitor LIC's performance and market conditions as the OFS progresses.
The OFS is part of the government's ongoing divestment strategy, following recent stake sales in other public sector undertakings. Investors should monitor LIC's performance and market conditions as the OFS progresses.
