India Prepares ₹10,000 Crore LIC Stake Sale Next Month to Boost Public Float

The Government of India is preparing to launch a significant fresh share sale for the Life Insurance Corporation of India (LIC) next month, aiming to raise up to ₹10,000 crore . According to people familiar with the matter, the government intends to offload an approximate 1.5% to 2% stake in the state-run insurance giant to institutional investors, with formal marketing expected to begin in late June or early July. The Department of Investment and Public Asset Management (DIPAM) under the Finance Ministry is reportedly working with top global and domestic brokerages including Goldman Sachs, Motilal Oswal Investment Advisors, BNP Paribas, and IIFL Capital Services to manage the high-profile transaction.The proposed divestment is primarily driven by regulatory compliance, as the government seeks to gradually increase public shareholding in the state-run insurer. While the Centre currently retains a massive 96.5% dominant stake following its historic ₹21,000 crore Initial Public Offering (IPO) in May 2022, the Securities and Exchange Board of India (SEBI) mandates a minimum public shareholding (MPS) of 25%.

Although LIC has been granted a 10-year window until May 2032 to fully satisfy this requirement, this upcoming tranche represents a strategic phased push to expand its free float liquidity in the markets.News of the upcoming supply overhang triggered an immediate reaction on the bourses today, causing LIC shares to slide as much as 4% to an intraday low of ₹114 on the BSE, snapping a three-day gaining streak. Despite the immediate near-term price volatility, the capital market buzz comes on the heels of exceptionally strong financial performance from the country’s largest institutional investor. LIC recently reported a robust 23% year-on-year surge in consolidated net profit to ₹23,467 crore for Q4 FY26, alongside announcing its first-ever 1:1 bonus share issue set for a record date of May 29, reinforcing its long-term financial stability even as the government prepares for its upcoming capital dilution