SEBI grants LIC 3-Year extension to Reach 10% public shareholding

15 May 2024 , 12:19 PM

The Securities and Exchange Board of India (SEBI) has granted Life Insurance Corporation of India (LIC) an additional three years to reach the 10% public shareholding requirement.

LIC, the country’s largest life insurer, announced this extension on May 15, 2024. The new deadline for LIC to achieve 10% public shareholding is set for May 16, 2027. Following the announcement, LIC’s stock price rose, trading 3.3% higher at ₹962.20 at 10:53 am. At the time of writing, the stocks were trading at ₹969.45 which is a 4.13% gain than the previous close.

As of March 31, 2023, LIC’s public shareholding was at 3.5%. To meet the 10% requirement, the government needs to divest an additional 6.5% over the next three years. According to the minimum public shareholding norms, all listed companies must maintain at least a 25% public float.

LIC went public in May 2022 through a ₹21,000 Crore issue, in which the government divested a 3.5% stake, marking the largest IPO in the country. The initial public offering (IPO) saw LIC’s shares listing at ₹867, which was 9% below the upper price band of ₹949, on May 17, 2022.

LIC shares experienced a downward trend, dropping 26% from the listing price until November 2023 when the stock began to recover. The stock price surpassed its issue price for the first time on January 30, 2024, after the Reserve Bank of India permitted LIC to increase its stake in HDFC Bank.

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