LIC OFS Sees Massive Institutional Demand as Government Raises Stake Sale to 6.5%; Retail Investors Get ₹10 Discount

5 Jul 2026 , 12:22 PM

The Government of India’s Offer for Sale (OFS) in Life Insurance Corporation of India (LIC) has received an overwhelming response from institutional investors, prompting the Centre to exercise the greenshoe option and significantly increase the size of the stake sale. The strong subscription reflects continued investor confidence in India’s largest insurer despite recent volatility in the stock price.

LIC OFS Subscribed 3.32 Times on Day 1

The non-retail portion of LIC’s Offer for Sale witnessed robust participation on the first day, with bids reaching 94.45 crore shares against the base offer of 28.46 crore shares. This translated into a subscription of 3.32 times (331.86%), driven by strong interest from institutional investors.

Major participants included domestic mutual funds, insurance companies, foreign portfolio investors (FPIs), high-net-worth individuals (HNIs), and other institutional buyers, highlighting strong confidence in LIC’s long-term growth prospects.

Government Increases OFS Size to 6.5% Stake

Encouraged by the overwhelming demand, the Government exercised the greenshoe option, increasing the total offer size from the initial 2.5% stake to 6.5% of LIC’s paid-up equity.

With this revision, the OFS size has been expanded to 82.22 crore shares, making it one of the largest public sector divestment transactions in recent years.

LIC OFS Price Details

The Government has fixed the floor price for the OFS at ₹382 per share, while the indicative discovered price stood at approximately ₹383.84 per share.

Retail investors and eligible LIC employees have been offered a ₹10 per share discount, reducing their effective purchase price to around ₹373.10 per share, making the offer more attractive for individual investors.

Retail Bidding Opens on August 5

The retail portion of the LIC OFS opened on August 5, 2026.

To encourage wider public participation, 10% of the total offer, equivalent to 8.22 crore shares, has been reserved exclusively for retail investors.

Additionally, up to 50 lakh shares have been earmarked for eligible LIC employees under the employee reservation category.

LIC Shares Recover After Sharp Fall

Despite the strong institutional demand, LIC shares experienced significant selling pressure on August 4, declining 7.86% on the BSE and 8.68% on the NSE, largely due to the OFS announcement and price adjustment.

However, investor sentiment improved on August 5, with LIC shares rebounding by as much as 1.54% during early trading to touch ₹397.35, indicating renewed buying interest after the initial correction.

Government’s Divestment Drive Gains Momentum

The successful LIC OFS marks another milestone in the Government’s divestment programme for FY27.

With this transaction, along with stake sales in public sector undertakings (PSUs) and remittances from SUUTI, the Government has mobilized ₹21,082 crore so far during the current financial year.

The strong response also demonstrates sustained investor appetite for quality public sector companies, even amid short-term market volatility.

Focus Shifts to LIC Q1 FY27 Results

Following the successful OFS, investors are now awaiting LIC’s Q1 FY27 financial results, which are scheduled to be announced on August 6, 2026, after the company’s Board meeting.

The quarterly earnings will provide fresh insights into LIC’s premium growth, profitability, investment income, and overall business performance, making it the next key trigger for the stock.

Conclusion

The LIC Offer for Sale has emerged as one of the most successful government stake sales of FY27, attracting exceptionally strong institutional demand and leading to an expansion of the offer size through the greenshoe option. With attractive pricing for retail investors, a dedicated retail reservation, and the upcoming quarterly earnings announcement, LIC remains firmly in focus for market participants.

Investors will now closely watch the company’s Q1 FY27 results and the overall response from retail investors to gauge the stock’s near-term trajectory.

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