The Government of India has announced an offer for sale (OFS) of up to a 6.5 percent stake in Life Insurance Corporation of India (LIC), with the transaction expected to raise as much as ₹330 billion if the entire issue, including the greenshoe option, is subscribed. The offer opens on Tuesday and could become the largest offer for sale ever conducted through India's stock exchange platform.

Under the offer structure, the government will initially divest a 2.5 percent stake comprising 316.2 million shares. It also retains the option to sell an additional 4 percent stake, or 505.99 million shares, if investor demand remains strong. The floor price for the issue has been fixed at ₹382 per share, representing a discount of nearly 11 percent to LIC's previous closing price of ₹428.50.

At the floor price, the base offer is expected to mobilize approximately ₹120.8 billion, while full exercise of the greenshoe option would increase the total proceeds to nearly ₹330 billion.

The stake sale comes as the government seeks additional fiscal resources amid pressure on public finances. Rising global crude oil prices and geopolitical tensions in the Middle East have increased the fiscal burden as the government continues measures to shield consumers from higher energy costs. The proceeds from the LIC disinvestment are expected to provide additional budgetary flexibility while supporting the government's broader disinvestment programme.

The government has already raised nearly $2 billion through stake sales during the April to June quarter of FY2026-27, exceeding the total annual disinvestment proceeds recorded in each of the previous three financial years. The current fiscal year's disinvestment target has been set at ₹800 billion.

The offering also supports LIC's progress towards meeting the Securities and Exchange Board of India's minimum public shareholding norms. Following its listing in 2022, LIC was granted a 10-year window until May 2032 to increase public shareholding to at least 25 percent. As of June 30, the Government of India held a 96.5 percent stake in the insurer.

According to the Department of Investment and Public Asset Management (DIPAM), the transaction will help the government achieve its public shareholding milestones ahead of schedule while further deepening participation in India's largest insurance company.