
According to sources from ET Now, the Indian government is considering selling some of its stake in the insurance giant Life Corporation of India (LIC) during the current fiscal year of FY25. LIC is currently majority-owned by the Government of India. Government holds a 96.50 percent stake in the company as of May 3, 2024.
LIC is India’s largest insurance company. It is under the ownership of Government of India and administrative control of the Ministry of Finance. As of May 2024 Life Insurance Corporation of India (LIC) has a market cap of $74 Billion.


The government has set an ambitious divestment target of ₹50,000 crore for FY25, about 67% higher than its revised target of collecting ₹30,000 crore selling its holdings in public sector enterprises in the current fiscal year ending 31 March.
Background on LIC’s Minimum Public Shareholding (MPS)
In December 2023, the Department of Economic Affairs, Ministry of Finance, granted a one-time exemption to LIC to achieve a 25 percent minimum public shareholding (MPS) within 10 years from the date of listing or until May 2032. This exemption was provided in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The MPS rule, enacted following a 2010 amendment of the Securities Contracts Regulation Rules by SEBI, requires all listed companies in India to ensure that at least 25 percent of their equity shares are owned by non-promoters (public). Promoters holding significant control over listed companies are required to reduce their stake by offering shares to institutions or issuing rights or bonus shares.
Implications and Next Steps
The government’s decision to offload its stake in LIC could have significant implications for the insurance sector and the overall market. This move may attract investors and potentially increase the liquidity of LIC shares. However, it is important to note that the decision is still under consideration, and further details regarding the stake sale have not been disclosed at this time.
As the situation develops and more information becomes available, it will be interesting to monitor the impact on LIC’s operations, market dynamics, and investor sentiment. Click here to Join our WhatsApp group to stay updated.