Shares of Life Insurance Corporation of India (LIC) experienced a significant downturn, dropping nearly 8% in Tuesday's trading session. The stock reached a low of Rs 390.70 on the BSE, bringing its year-to-date decline to over 11%.
This market reaction coincides with the launch of the government's two-day Offer for Sale (OFS), which opened for subscription specifically for non-retail investors on August 4, 2026. The President of India, acting through the Department of Financial Services under the Ministry of Finance, has proposed to divest up to a 6.5% stake in the state-run insurer.
OFS Details and Pricing
The government set the floor price for the OFS at Rs 382 per share. This represents a discount of approximately 10% compared to LIC's closing price of Rs 424.35 on Monday. The initial base issue comprises 316.25 million LIC shares, accounting for 2.50% of the company's total equity. Should there be oversubscription, the promoter has the option to sell an additional 4% stake, totaling approximately 822.25 million shares.
The OFS process is structured over two days. August 4 is designated for non-retail investors, while August 5 is reserved for retail investors and company employees. Retail investors and employees will receive a discount of Rs 10 per share on the cut-off price. A minimum of 10% of the offer shares is reserved for retail investors, 25% for mutual funds and insurance companies, and an additional 0.04% for employees.
Analyst Outlook on LIC Stock
Despite the current share price drop, the broader analyst sentiment on LIC remains largely positive. Out of 25 analyst ratings, 21 have issued 'Buy' calls, three recommend 'Hold,' and only one suggests a 'Sell.' The consensus target price among these analysts stands at Rs 547, implying a potential upside of 39.6% from the current market price. Haitong International has set a higher target of Rs 670, while Investec, Antique Stock Broking, and Jefferies have targets of Rs 450, Rs 520, and Rs 480, respectively.
IIFL Capital Services, Goldman Sachs (India) Securities, BNP Paribas Securities India, and Motilal Oswal Investment Advisors are serving as brokers for the sellers, with IIFL Capital Services also acting as the settlement broker for the transaction.