The Government of India sold part of its stake in Life Insurance Corporation of India (LIC) through an offer for sale (OFS) at a 10% discount, and LIC shares fell sharply soon after the announcement and execution. The reported price fall was close to 8% on the BSE, with the stock finishing just above ₹391 per share after briefly trading around ₹400. This matters for UPSC because LIC stake sales are often used to discuss disinvestment strategy, fiscal resource mobilisation, and market signalling in capital markets.
What happened (sale details and immediate market reaction)
LIC’s share price fell close to 8% on the BSE after the government sold part of its holding via an OFS conducted at a 10% discount. The stock moved lower through the session, touched an initial trading level around ₹400, and finished at just above ₹391 per share, which was reported as a two-month low.
The Government of India’s transaction involved selling 6.5% of LIC equity through the OFS at the stated discount. The offering structure included a base offer to sell up to 2% equity and an additional option to sell a further 4.5%.
Background and earlier position (LIC IPO context)
The reported LIC OFS came roughly four years after LIC’s initial public offering (IPO). LIC’s IPO raised about ₹21,000 crore for a 3.5% stake, establishing a starting point for the government’s subsequent partial disinvestment and ownership reduction.