Government Raises ₹31,552 Crore from LIC Offer for Sale, Fully Exercises Greenshoe Option
Key Takeaways
- •The Indian government raised ₹31,552 crore through a 6.5% Offer for Sale in LIC, representing one of the largest single disinvestment receipts in recent years.
- •The OFS was oversubscribed on both trading days, which led the government to exercise the entire greenshoe option to offer additional shares beyond the base allocation.
- •LIC's public shareholding has risen to 10%, satisfying SEBI's minimum public shareholding requirement and placing the company well ahead of its May 2027 compliance deadline.
- •Prior to this transaction, the government held approximately 96.5% of LIC's shares, having listed the insurer through India's largest IPO in May 2022, which raised around ₹21,000 crore.
- •The proceeds from the OFS contribute to the government's annual asset monetisation targets under the Union Budget and are recorded as non-debt capital receipts in fiscal accounts.
The Indian government has raised ₹31,552 crore through its 6.5% Offer for Sale (OFS) in Life Insurance Corporation of India (LIC), after the issue attracted strong demand from both institutional and retail investors. The transaction ranks among the largest single disinvestment receipts in recent years and contributes to the government's annual asset monetisation targets under the Union Budget. DIPAM Secretary Arunish Chawla confirmed the outcome on Wednesday, August 5, 2026.
The OFS was oversubscribed on both trading days, which prompted the government to exercise the entire greenshoe option. The greenshoe mechanism allows the seller to offer additional shares beyond the base size when demand exceeds the initial allocation.
With the completion of this transaction, LIC's public shareholding has risen to 10%. This satisfies the minimum public shareholding (MPS) requirement set by the Securities and Exchange Board of India (SEBI), which mandates that listed companies maintain at least 25% public float. As a newly listed entity, LIC was given until May 2027 to comply. The insurer is now well ahead of that regulatory deadline.
LIC, India's largest life insurance company and one of the country's largest institutional investors by assets under management, was listed on the stock exchanges in May 2022 following an initial public offering (IPO) that raised approximately ₹21,000 crore. At the time, it was the largest IPO in Indian capital markets history. Prior to this OFS, the government held around 96.5% of the company's shares.
The Department of Investment and Public Asset Management (DIPAM), under the Ministry of Finance, oversees the government's disinvestment programme, including OFS transactions in state-owned enterprises. Proceeds from such sales are recorded as non-debt capital receipts in the government's fiscal accounts.
Secretary, DIPAM (@SecyDIPAM) shared the announcement on X (formerly Twitter):
Offer for Sale in the Life Insurance Corporation of India (LIC) closed with an overwhelming response from both retail and institutional investors. The issue was over-subscribed on both days and the Government exercised its entire green shoe option. With this the public ownership… pic.twitter.com/TQZNQhfi3X
— Secretary, DIPAM (@SecyDIPAM), August 5, 2026
The full X post is available at x.com/SecyDIPAM/status/2085037448846053768.
