Government Considers Stake Sale in LIC through FPO Next Financial Year
The government is actively exploring the option of reducing its stake in the Life Insurance Corporation (LIC) through a follow-on public offer (FPO) in the upcoming financial year. Financial Services Secretary M Nagaraju shared this information with reporters on Monday.
Current Stake in LIC
– The government currently holds a 96.5% stake in LIC.
– In May 2022, it sold 3.5% through an initial public offering (IPO), priced between ₹902-₹949 per share, generating approximately ₹21,000 crore.
Future Plans for LIC Stake Sale
– Nagaraju stated, “The LIC public offer has to be conducted gradually. We have instructed the Department of Investment and Public Asset Management (DIPAM) to assess the potential for further stake dilution in LIC.
– He noted that the LIC FPO may occur in the next financial year provided that all necessary approvals are in place and the market conditions favor such a move.
Regulatory Requirements
To meet the mandated 10% public shareholding requirement by May 2027, the government is expected to offload an additional 6.5% stake in the state-owned life insurer.
Financial Performance of LIC
– As the country’s largest insurer, LIC boasts a market capitalization of ₹5.08 lakh crore, with shares trading at around ₹804 on the BSE as of Monday.
– The insurer reported a 32% year-on-year increase in net profit, reaching ₹10,053 crore for the three-month period ending September 2025, up from ₹7,621 crore in the same period last fiscal year. This profit surge was primarily fueled by a reduction in commission expenses.
– Total income for the same period rose to ₹2,39,614 crore, compared to ₹2,29,620 crore a year earlier.
In conclusion, the government’s contemplation of a stake sale in LIC through an FPO signals a strategic move to enhance public ownership while also addressing regulatory requirements. As this situation develops, stakeholders and investors will be keenly watching for further announcements regarding the specifics of this potential offering.