LIC OFS Opens today: Government to sell 6.5% stake on offer 

Mumbai | August 4, 2026  

The Government of India has initiated an Offer for Sale (OFS) in Life Insurance Corporation of India (LIC) to further dilute its stake in the country’s largest insurance company. As per the draft offer document, the Centre has proposed to offer 2.5% equity stake of LIC in the OFS, with an option to sell an additional 4% shares through the greenshoe option, if the demand arises.   

The OFS has opened for bidding (for non-retail investors) today whereas retail investors can bid on Wednesday (5th August’26). This dilution is expected to boost LIC’s public shareholding to enable the insurer to meet SEBI’s minimum public shareholding norms.   

LIC OFS: Highlights   

Company - Life Insurance Corporation of India (LIC)   

Offer Type - Offer for Sale (OFS)   

Minimum offer - 2.5% stake   

Greenshoe option - Up to an additional 4% stake   

Maximum on offer - Up to 6.5% of stake   

Floor price - ₹382 per share   

Non-retail bidding - 4th August 2026   

Retail bidding - 5th August 2026   

Government’s stake sale in LIC   

The government has offered an initial 2.5% stake in LIC through the Offer for Sale (OFS), with an option to sell an additional 4% stake through the greenshoe option, subject to demand.

Thus, in total, the government can offer up to 6.5% of its share in LIC through the OFS.   

 LIC OFS: Floor price   

As per the Department of Investment and Public Asset Management (DIPAM), the floor price of the LIC OFS has been fixed at ₹382 per share.   

However, it is pertinent to mention here that investors cannot bid a price lower than the said price. The allocation of shares will be made as per the OFS rules and the demand for the insurer’s shares in the market.   

 LIC OFS: Bidding schedule   

The government has scheduled the OFS bidding process in consonance with the standard procedure followed by listed companies in the country:   

• Non-retail investors: Eligible to bid on Tuesday, 4th August 2026   

• Retail investors: Can apply on Wednesday, 5th August 2026   

Therefore, retail investors must remember to place their bids through their respective stockbroker or trading platform before the last date.   

 What is a greenshoe option?   

A greenshoe option allows the issuer company to raise additional capital beyond the initial public offering (IPO) or offer for sale (OFS) if there is demand for the shares in the market.   

In the case of the LIC OFS, the greenshoe option will enable the Government of India to offer additional 4% stake if the demand arises, taking the total stake on offer to 6.5%.   

Why is the Government selling its stake?   

The government aims to boost LIC’s public shareholding to meet SEBI’s Minimum Public Shareholding (MPS) norms.   

According to SEBI norms, any listed entity must have a minimum of 25% of its shares open for public trading. Currently, the government holds around 96.5% of LIC’s stake. Therefore, it will have to dilute its shareholding in the insurer in the long run.   

Conclusion   

The LIC OFS gives investors another chance to bid for shares in India’s largest life insurer. With a minimum 2.5% stake on offer and an additional 4% shares through the greenshoe option, Centre expects to raise significant amount of money through the OFS.   

Investors must remember to note the OFS bidding schedule and go through all the relevant details of the LIC OFS before applying.  

Stay updated with the latest Stock Market News, IPO Updates and Market Developments on PL Capital. 

Disclaimer: Investments in securities market are subject to market risks, read all the related documents carefully before investing.

This is a knowledge-sharing initiative by PL Capital. The information provided is only for educational purposes and should not be considered as financial advice & has no influence on the investment/trading decisions of any investors.

For detailed disclaimers/disclosure and Mandatory terms and conditions please visit our website https://www.plindia.com/regulatory-content/