Govt weighs LIC FPO next financial year to meet 10% public shareholding rule

The government is considering further dilution of its holding in Life Insurance Corporation (LIC) through a follow-on public offering in the next financial year, as it moves towards meeting minimum public shareholding norms, PTI reported.

Financial Services Secretary M Nagaraju said the process will be gradual and linked to market conditions, with the Department of Investment and Public Asset Management (DIPAM) tasked with evaluating the stake dilution roadmap.

Speaking to reporters, Nagaraju said, "LIC public offer has to be done slowly. We have asked DIPAM (Department of Investment and Public Asset Management) to look at government stake dilution in LIC." PTI reported.

"LIC FPO may come in the next financial year if all approvals are in place and market conditions are conducive." he added.

At present, the government holds a 96.5 per cent stake in LIC. It had earlier sold 3.5 per cent through an initial public offering in May 2022 at a price band of Rs 902-949 per share, raising about Rs 21,000 crore.

The Centre is required to offload another 6.5 per cent stake in the state-owned insurer to comply with the mandated 10 per cent public shareholding requirement by May 2027. The final quantum of stake sale, pricing and timing will be decided later.

LIC currently has a market capitalisation of about Rs 5.08 lakh crore, with its shares settling at around Rs 804 on the BSE on Monday.

On the financial front, the insurer reported a 32 per cent year-on-year rise in net profit to Rs 10,053 crore for the three months ended September 2025, compared with Rs 7,621 crore in the corresponding period of the previous fiscal. The rise in profit was attributed to lower commission outgo.

Total income rose to Rs 2,39,614 crore in the September 2025 quarter from Rs 2,29,620 crore in the year-ago period, according to company financial disclosures.