India Exercises Green Shoe Option in LIC Stake Sale

The Government of India exercised a green shoe option for its offer for sale (OFS) in the Life Insurance Corporation of India (LIC) after institutional investors oversubscribed the base offer 3.32 times. This decision increases the total potential stake sale from a base of 2.5% to 6.5%, which is expected to raise approximately ₹31,000 crore.

Institutional bids reached ₹36,400 crore on Tuesday, August 4, 2026, for over 94.45 crore shares at an indicative price of ₹383.84. The government set a floor price of ₹382 per share, representing a 10% to 11% discount from the previous Monday's close. Following the announcement, LIC shares fell approximately 8% due to concerns over increased share supply.

The disinvestment allows LIC to increase its public shareholding from 3.5% to 10%, meeting the Securities and Exchange Board of India's minimum public shareholding regulatory milestone ahead of the May 16, 2027, deadline. The government currently owns 96.5% of the insurer and must reduce this holding to 75% by 2032.

While the sale opened for non-retail investors on Tuesday, bidding for retail investors is scheduled for Wednesday, August 5, 2026.