LIC OFS 2026: The Government of India’s Offer for Sale (OFS) of Life Insurance Corporation of India (LIC) is now open for retail investors and eligible employees on August 5. The issue follows an overwhelming response from institutional investors, making it one of the biggest disinvestment exercises in India’s capital market history.
If you’re planning to participate in the LIC OFS, here’s everything you need to know before placing your bid.
Record Demand From Institutional Investors
The first day of the LIC OFS witnessed exceptional participation from institutional investors, who placed bids worth nearly Rs 36,400 crore.
According to the Department of Investment and Public Asset Management (DIPAM), investors bid for more than 94.45 crore shares, oversubscribing the base offer by 3.32 times. Following this strong demand, the government exercised its 4% greenshoe option, increasing the total stake on offer.
Instead of selling the initial 2.5% stake, the Centre will now divest 6.5% of LIC, equivalent to 82.22 crore equity shares.
At the floor price of Rs 382 per share, the sale is expected to generate approximately Rs 31,000 crore, helping the government meet SEBI’s minimum public shareholding (MPS) norms well before the May 2027 deadline.
10 Important Things Retail Investors Should Know
1. LIC OFS Is Open Only Today for Retail Investors
Retail investors and eligible employees can submit their bids only on August 5, between 9:15 AM and 3:30 PM, through registered stockbrokers.
2. Floor Price Fixed at Rs 382 Per Share
The government has set the floor price at Rs 382 per share. Investors can either place bids at this price or above it, or simply choose the Cut-Off Price option.
3. Rs 10 Discount Available for Eligible Investors
Retail investors and eligible employees are entitled to a Rs 10 per share discount, provided they place their bids using the Cut-Off Price option.
4. 10% of the Shares Reserved for Retail Investors
Out of the total 82.22 crore shares, nearly 8.22 crore shares have been reserved exclusively for retail investors.
Additionally, 25% of the overall issue has been earmarked for mutual funds and insurance companies.
5. Choosing the Cut-Off Price Can Be Beneficial
Rather than quoting a specific bid price, retail investors can opt for the Cut-Off Price.
This allows them to receive shares at the final discovered price if allotted, while also remaining eligible for the Rs 10 discount.
6. Retail Investment Limit Is Rs 2 Lakh
To qualify under the retail category, the total value of all bids across stock exchanges must not exceed Rs 2 lakh.
Applications above this limit will not be considered retail bids.
7. Bids Can Be Modified or Cancelled
Investors have the flexibility to change or withdraw their bids during market hours on August 5, provided the order was placed with 100% upfront payment.
8. Allotment Will Be Proportionate If Oversubscribed
If demand exceeds the shares reserved for retail investors, allotment will be made on a proportionate basis instead of following a first-come, first-served system.
9. Full Payment Is Mandatory
Applicants must ensure they have 100% of the bid amount available at the time of placing the order.
10. Shares Will Be Credited Under T+2 Settlement
Successful bidders will receive LIC shares under the T+2 settlement cycle, while funds blocked for unsuccessful bids will be released after the allotment process is completed.
Government Expands Offer After Massive Institutional Response
The enthusiastic participation from institutional investors encouraged the government to increase the size of the OFS by exercising the greenshoe option.
As a result, the total issue has been expanded to 82.22 crore shares, representing 6.5% of LIC’s equity.
Despite the robust demand, LIC shares declined 7.86% to Rs 391 on Tuesday after the OFS floor price was announced at Rs 382, which was nearly 10% below the previous day’s closing price.
Why Is the Government Selling LIC Shares?
The Centre currently holds 96.5% ownership in LIC.
The stake sale is part of the government’s plan to comply with SEBI’s Minimum Public Shareholding (MPS) regulations, which require LIC to increase its public shareholding to at least 10% by May 16, 2027.
The government had previously raised around Rs 21,000 crore through LIC’s 3.5% IPO in May 2022. If the current OFS is fully subscribed, it will become one of the largest disinvestment transactions in India’s history.
Should Retail Investors Apply?
The LIC OFS offers retail investors an opportunity to purchase shares at a discounted price, along with the convenience of using the Cut-Off Price option.
However, as with any stock market investment, investors should carefully assess LIC’s fundamentals, market conditions, long-term growth prospects and their own financial goals before making an investment decision.