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The Government of India opened an Offer for Sale (OFS) in Life Insurance Corporation of India on 4 August 2026 for non-retail investors, with retail bidding on 5 August.
The OFS covers a base 2.5% stake with a green shoe option of a further 4%, taking the maximum sale to 6.5% of LIC's equity.
The floor price was fixed at Rs 382 per share, roughly 10% below LIC's 3 August closing price, and the stock fell sharply when bidding opened.
A full sale would raise about Rs 31,000 crore and cut the government's holding from 96.5% to about 90%.
The sale is driven by SEBI's minimum public shareholding requirement, for which LIC has time until 16 May 2027 to reach a 10% public float.
An OFS is a route through which promoters of an already listed company sell part of their existing shareholding directly on the stock exchange platform, through a separate bidding window. No new shares are created. That is the crucial difference from an IPO or an FPO, where the company issues fresh shares and receives the money. In an OFS the proceeds go to the selling shareholder, here the Government of India, and not to LIC. Because the total number of shares stays the same, earnings per share and the company's capital base are unchanged; only the ownership pattern shifts from the promoter to public investors. The share price still fell on the opening day, because a floor price set below the market price gives buyers a cheaper route to the same stock and a sudden jump in the free float takes time for the market to absorb.
Simple Analogy: An IPO is a bakery baking and selling extra loaves; an OFS is the owner selling loaves already on his own shelf. The bakery's output is unchanged either way, but the owner now keeps fewer loaves.
| Feature | OFS | IPO / FPO |
|---|---|---|
| New shares issued | No | Yes |
| Who receives the money | The selling shareholder | The company |
| Effect on share capital | Unchanged | Increases |
| Effect on earnings per share | Unchanged | Diluted |
| Typical duration | One or two trading days | Three or more days |
India's largest life insurer, a statutory corporation created by the LIC Act, 1956; listed on the exchanges since May 2022
Securities market regulator; prescribes the minimum public shareholding norm and the OFS mechanism, which it introduced in 2012
Ministry of Finance department that manages the government's equity holdings and executes disinvestment transactions such as this OFS
GS Paper III > Indian Economy > Mobilisation of resources, capital markets, disinvestment
Financial Awareness > Capital markets, SEBI norms, disinvestment
General Awareness > Economy and current events
An exchange-based mechanism, introduced by SEBI in 2012, that lets promoters of listed companies sell existing shares to the public through a bidding window.
A provision allowing the seller to offload shares over and above the base offer size if demand is strong.
SEBI's requirement that listed companies keep at least 25% of shares with the public; LIC has been given time until 16 May 2027 to reach 10%.
The minimum price at which bids are accepted in an OFS; bids below it are rejected.
Sale of government holding in a public sector enterprise, which may be partial or strategic.