Government to Initiate Roadshows for LIC Divestment
The Indian government is preparing to begin roadshows. These will start in two weeks. Their purpose is to divest a portion of its stake in Life Insurance Corporation (LIC) of India. Sources cited by CNBC-TV18 suggest the government plans to sell 2.5-3% of its stake in LIC through an Offer For Sale (OFS) process. Motilal Oswal and IDBI Capital have reportedly been appointed as merchant bankers to manage the OFS process.
Key Details:
- Stake Sale: 2.5-3% of government’s stake in LIC
- OFS Process: Offer For Sale to raise Rs 14,000 crore-Rs 17,000 crore
- Roadshows: Investor roadshows to gauge interest and finalize pricing
- LIC Shares: Currently trading at Rs 887.40 with a 3.18% decrease
Government’s Plan:
The government’s divestment plan aims to meet the regulatory requirement of 10% public shareholding by May 16, 2027. LIC has received a three-year extension from SEBI to achieve this target. The Centre has set a disinvestment target of Rs 47,000 crore for FY26.
LIC’s Performance:
LIC reported a 5% rise in first-quarter profit, driven by higher premiums and improved product mix. Key highlights include ¹:
- Profit After Tax: Rs 10,987 crore for Q1 FY26, up from Rs 10,461 crore in Q1 FY25
- Net Premium Income: Rs 1.19 lakh crore, a 5% increase year-over-year
- VNB Margin: 15.4%, up from 13.9% a year ago
- Solvency Ratio: 2.17, indicating improved financial stability
The government’s stake sale plan is part of a broader divestment strategy to optimize valuation and meet regulatory requirements
