LIC OFS opens for retail investors: Should you apply after strong institutional response?
LIC OFS opens for retail investors after a 3.32x institutional subscription. Government exercises full greenshoe option. Check floor price, discount, expert views and whether you should apply.
- Aug 5, 2026,
- Updated Aug 5, 2026 9:25 AM IST
LIC of India OFS: The state-run insurance behemoth Life Insurance Corporation of India (LIC) shall extend its offer-for-sale (OFS) for retail investors on Wednesday, August 05. The Government of India has decided to exercise the entire green shoe option in the OFS of LIC after the issue received an enthusiastic response from institutional investors on the first day of bidding.
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said that the LIC OFS was oversubscribed 3.32 times on the first day following overwhelming demand from investors. The two day OFS will be launched for retail investors on Wednesday, August 05.
Shares of LIC tanked more than 9.25 per cent on Tuesday to hit lows of Rs 388.80, but settled with a 8.68 fall at Rs 391.30 for the day. The government on Monday (August 3) announced it would sell up to a 6.5 per cent stake in LIC through an OFS at a floor price of Rs 382 per share, from Tuesday (August 4). The floor price was at a steep 10 per cent discount compared to its Monday's close at Rs 424.35.
Mahesh M. Ojha, VP of Research at Kantilal Chagganlal Securities suggested that retail investors can subscribe to the OFS with a 9-12 month horizon. "The downside seems to be limited and retail investors will get a Rs 10 discount over the determined final price, which gives further cushion. The undervaluation of the counter make it a decent bet for investors."
Following the strong institutional demand, the government has decided to exercise the entire 4 per cent green shoe option, taking the total stake on offer to 6.5 per cent. If fully subscribed, the sale of more than 82.22 crore shares is expected to fetch around Rs 31,000 crore for the government's disinvestment programme. The OFS opened for non-retail investors on Tuesday, August 04.
The LIC stock is fundamentally undervalued and has good potential to rise along with the market. Despite weak gross profit margins, the company remains profitable and provides good dividends. This makes it a decent value pick, said Sanjit Singh Paul, Managing partner at Modular Capital
"With a floor price of Rs 382, it only makes good sense to bid below Rs 385 to ensure a margin of safety for a value investor. A 3 per cent head start to a nearly 30 per cent undervaluation is a good (but not great) place to deploy capital," the Smallcase Manager suggested.
The government currently holds a 96.5 per cent stake in LIC. After the completion of the OFS, its shareholding is expected to decline to 90 per cent, in line with the MPS norms. The market regulator SEBI had granted LIC time until May 2027 to reduce the government's holding to 90 per cent to comply with the minimum public shareholding requirement.
In an exclusive interaction with Business Today TV, Gaurav Sharma, Head of Research at Globe Capital Market said that LIC shares have failed to generate positive returns for the investors since its IPO. The euphoria around its has faded out early, suggesting investors to exit LIC counter as per the opportune time. Sharma suggested to consider AMC space of the insurance players.
The government had earlier diluted a 3.5 per cent stake in LIC through its initial public offering (IPO) in May 2022 at a price band of Rs 902-949 per share, raising around Rs 21,000 crore. However, the stock traded ex-date for bonus in May 2026, taking the effective IPO price to Rs 474.5 per share. The stock is nearly 18 per cent below its IPO price.
LIC of India OFS: The state-run insurance behemoth Life Insurance Corporation of India (LIC) shall extend its offer-for-sale (OFS) for retail investors on Wednesday, August 05. The Government of India has decided to exercise the entire green shoe option in the OFS of LIC after the issue received an enthusiastic response from institutional investors on the first day of bidding.
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said that the LIC OFS was oversubscribed 3.32 times on the first day following overwhelming demand from investors. The two day OFS will be launched for retail investors on Wednesday, August 05.
Shares of LIC tanked more than 9.25 per cent on Tuesday to hit lows of Rs 388.80, but settled with a 8.68 fall at Rs 391.30 for the day. The government on Monday (August 3) announced it would sell up to a 6.5 per cent stake in LIC through an OFS at a floor price of Rs 382 per share, from Tuesday (August 4). The floor price was at a steep 10 per cent discount compared to its Monday's close at Rs 424.35.
Mahesh M. Ojha, VP of Research at Kantilal Chagganlal Securities suggested that retail investors can subscribe to the OFS with a 9-12 month horizon. "The downside seems to be limited and retail investors will get a Rs 10 discount over the determined final price, which gives further cushion. The undervaluation of the counter make it a decent bet for investors."
Following the strong institutional demand, the government has decided to exercise the entire 4 per cent green shoe option, taking the total stake on offer to 6.5 per cent. If fully subscribed, the sale of more than 82.22 crore shares is expected to fetch around Rs 31,000 crore for the government's disinvestment programme. The OFS opened for non-retail investors on Tuesday, August 04.
The LIC stock is fundamentally undervalued and has good potential to rise along with the market. Despite weak gross profit margins, the company remains profitable and provides good dividends. This makes it a decent value pick, said Sanjit Singh Paul, Managing partner at Modular Capital
"With a floor price of Rs 382, it only makes good sense to bid below Rs 385 to ensure a margin of safety for a value investor. A 3 per cent head start to a nearly 30 per cent undervaluation is a good (but not great) place to deploy capital," the Smallcase Manager suggested.
The government currently holds a 96.5 per cent stake in LIC. After the completion of the OFS, its shareholding is expected to decline to 90 per cent, in line with the MPS norms. The market regulator SEBI had granted LIC time until May 2027 to reduce the government's holding to 90 per cent to comply with the minimum public shareholding requirement.
In an exclusive interaction with Business Today TV, Gaurav Sharma, Head of Research at Globe Capital Market said that LIC shares have failed to generate positive returns for the investors since its IPO. The euphoria around its has faded out early, suggesting investors to exit LIC counter as per the opportune time. Sharma suggested to consider AMC space of the insurance players.
The government had earlier diluted a 3.5 per cent stake in LIC through its initial public offering (IPO) in May 2022 at a price band of Rs 902-949 per share, raising around Rs 21,000 crore. However, the stock traded ex-date for bonus in May 2026, taking the effective IPO price to Rs 474.5 per share. The stock is nearly 18 per cent below its IPO price.