The government is preparing to sell its stake in the country’s largest insurance company Life Insurance Corporation (LIC). According to media reports, the government has approved the Offer-for-Sale (OFS) in LIC, which will be brought to the market soon. According to reports, the government can sell 6.5% stake in LIC. Offer for Sale (OFS) means that the existing shareholders of the company (such as promoters, investors or other large shareholders) will offer the shares of the company they hold to the public for sale. This means that the company is not issuing new shares to raise money, but the already existing shares are being sold. LIC has 96.5% market share
The government has a 96.5% stake in LIC. 3.5% stake was sold in 2022. Now the government is planning to sell 2-3% more stake, which can raise about Rs 9,500 to 14,500 crore. This step is part of the plan to raise money by selling shares of government companies in 2025-26. LIC’s IPO came in May 2022
Earlier, the government had raised Rs 20,557 crore by selling its 3.5% stake in LIC through IPO. Till now the government had raised this amount by selling 22.14 crore shares of the company. In the last one year, LIC’s stock has seen a decline of 12%. LIC was formed in 1956 by the merger of 245 companies
On 19 June 1956, the Life Insurance Corporation Act was passed in Parliament. By then there were 154 life insurance companies, 16 foreign companies and 75 provident fund companies in India. On 1 September 1956, the government nationalized all 245 companies and formed a new company. The company was named LIC i.e. Life Insurance Corporation of India. Then the government had issued Rs 5 crore for this company.
