By Admin 
The government is preparing to reduce its stake in Life Insurance Corporation of India (LIC) to 6.5 percent by the end of the year. It is being told that the government can sell stake worth Rs 8,800 crore to Rs 13,200 crore. Quoting sources, the Economic Times report said that the purpose of taking this step is to increase public shareholding in the company as per the rules of market regulator SEBI.
Why is the government selling its stake?
The government will have to sell 6.5 percent more stake in LIC by May 16, 2027. According to SEBI rules, at least 10 percent stake in any listed company should be with the public. Whereas after listing, the public holds only 3.5 percent stake in LIC. Whereas the government has 96.5 percent stake in LIC, hence the government will have to sell 6.5 percent more of its stake within the stipulated time. It will be sold in several batches so that the share price is not affected much and the existing shareholders do not suffer loss.
Impact visible on shares
The impact of this news was seen in LIC shares on Wednesday. It opened at Rs 901. During trading, it was trading at Rs 915, up almost 2 percent. Investors also looked positive about this because by selling stake, liquidity in the market can improve and the ownership rights of LIC can also be divided among many other people.
However, despite the positive response from the market, LIC shares remain below its IPO price of Rs 949. On Tuesday, it closed at Rs 900.70. LIC has got time till May 2032 to increase public shareholding to 25 percent. Don’t worry about the government selling its stake in LIC because it will have no impact on your policy, bonus or claims.
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