LIC Stake Sale: The government will reduce its stake in the country’s largest insurance company, LIC. The central government has a 96.5 percent stake in this public-sector giant company. The central government will make about 5 percent of it available in the market. For this, the path of a follow-on public Offer (FPO) or Qualified Institutional Placement (QIP) can be adopted. People have showered a lot of love on LIC’s IPO.
Minimum Public Shareholding Rule Has To Be Followed
A report in The Hindu Business Line claims that the government is seriously considering reducing its stake in Life Insurance Corporation. They must bring LIC under market regulator SEBI’s Minimum Public Shareholding (MPS) rule. For this, the government wants to reduce its stake in LIC gradually. With this strategy, it can earn good money from the stake.
IPO Of Rs 21,000 Crore Came In May 2022
LIC’s IPO, worth Rs 21,000 crore, occurred in May 2022. It is considered to be India’s largest IPO. The company entered the market entirely through an Offer for Sale. The company sold 221,374,920 equity shares for Rs 949. Through the IPO, the government reduced its stake by 3.5 percent. If the government brings FPO or QIP, it will get more valuation.
Public Shareholding Will Have To Be 10 Percent By 2027
On December 20, 2023, the Department of Economic Affairs of the Ministry of Finance gave LIC 10 years under the purview of MPS rules. The company has until May 2032 to put its 25 percent stake in the market. Apart from this, SEBI has given LIC 3 years to achieve 10 percent public shareholding. The deadline to achieve this limit is May 16, 2027.
