The Indian government is preparing to launch formal marketing for a proposed stake sale in Life Insurance Corporation of India (LIC) that could raise as much as $1 billion, according to reports.
Key Highlights
- Government plans 2% LIC stake sale worth nearly $1 billion.
- Formal marketing for LIC share sale may begin in June 2026.
The Centre is considering selling off its stake in the state-owned insurance major to institutional investors, with the stake likely to be divested between 10 and 20 points, or about 2%, adding that the sale is expected to be completed in late June or early July.
The Department of Investment and Public Asset Management (DIPAM), part of the Finance Ministry, is said to be in talks with international and domestic investment banks, including Goldman Sachs Group Inc., Motilal Oswal Investment Advisors Ltd., BNP Paribas SA and IIFL Capital Services Ltd, to handle the planned offering.
According to reports, the transaction still has ongoing talks and the transaction size and time as well as its form may vary according to market demand and investor demand. The government officials, LIC and appointed bankers have not yet made any official comments on the proposed stake sale.
The deal is likely to be one of the biggest equity market deals in India next month, coming at a time when financial markets are treading through some turbulent waters, with geopolitical conflicts in the Middle East, starting in Israel. India's import bill and inflationary pressures are also on the rise with the Iran conflict, which has pushed crude oil prices higher.
The country had previously divested its 3.5% stake in LIC in its maiden IPO in May 2022, which saw it rake in nearly Rs 21,000 crore, the biggest public sale in the country's history. The share prices of IPO were sold at Rs 949 per share.
According to stock exchange filings, as on March 31, the government owned 96.5% of the shares of LIC. The insurer had listed in 2022 but has been given time till May 2032 to comply with SEBI's minimum 25% public shareholding condition.
Analysts believe the proposed share sale forms part of the government’s broader divestment strategy aimed at improving market liquidity, increasing public participation and gradually aligning LIC with regulatory shareholding norms.
The development also triggered pressure on LIC shares, with the stock declining after reports of the proposed stake dilution surfaced in the market.
Also Read: LIC Emerges as India's Top Financial Sector Profit Leader in Q4 FY26
Recent Developments
LIC reported a strong 23% year-on-year rise in consolidated net profit to Rs 23,420 crore in Q4 FY26, making it the highest profit-generating company in India’s financial sector for the March quarter. Likewise, LIC remained the top profit making Central Public Sector Enterprise (CPSE) compared to other major banks like SBI and HDFC Bank.
The insurer's Assets Under Management (AUM) grew by Rs 57.29 lakh crore and its adjusted net worth jumped to Rs 1.69 lakh crore, indicating enhanced financial stability and capital utilisation.
