LIC OFS opens for retail investors: Should you apply in insurance behemoth's offer?

The government’s offer for sale (OFS) in insurance behemoth Life Insurance Corporation of India (LIC) opens for retail investors today, with analysts listing reasons why investors should consider participating.

LIC announced on Monday that the government plans to sell a 2.5% equity stake in the company as part of the base offer, with an additional 4% available as a green shoe option. The floor price was fixed at Rs 382 apiece, taking the total OFS size to nearly Rs 31,410 crore. The floor price implies a discount of 3% from the stock’s previous closing price of Rs 391.3 apiece on NSE.

The OFS opened for non-retail investors on August 4, and saw strong participation. The offer was oversubscribed more than 3 times its offer size. It now opens for retail investors today.


Investors can participate between 9.15 am and 3.30 pm using the separate OFS window on NSE and BSE. A minimum of 10% of the offer size has been reserved for retail investors. A discount of Rs 10 per share on the cut-off price has been set for retail and employees.

Should you participate in LIC OFS?

At the effective retail price of Rs 372 apiece (after the retail discount of Rs 10 per share), the stock is available at around 0.3x FY26 embedded value, a significant discount to listed private life insurers that trade at materially higher P/EV multiples, said Ajit Mishra, SVP of Research at Religare Broking. He noted that LIC has also strengthened its fundamentals, with the FY26 VNB margin improving to 21.2% and the solvency ratio rising to 2.35x, reflecting a robust capital position.

"While persistence remains an area to watch, the combination of compelling valuation, improving profitability and market leadership makes the OFS an attractive long-term investment opportunity," according to the analyst.

Also read | Government unveils offer for sale to dilute LIC stake

LIC shareholding pattern

The government owned a 96.5% stake in LIC as of June 30, 2026, according to the latest data on the company’s shareholding pattern. This makes LIC one of the largest government-owned listed companies, and the public float must gradually increase to comply with minimum public shareholding requirements. More than 20.92 lakh retail shareholders meanwhile held a 1.55% stake in the insurance behemoth.

"The Life Insurance Corporation of India (LIC) is a cornerstone of the nation's financial sector, serving as India's largest life insurer and the country's second-largest public sector enterprise by market capitalisation. Its institutional eminence is recognised both domestically and globally, with LIC ranked as the fourth most valuable brand in India and the world’s third-strongest insurance brand. Furthermore, LIC's exceptional operational scale and market penetration are exemplified by its Guinness World Record for the most life insurance policies sold within a 24-hour period, reflecting unwavering public trust and unmatched execution capabilities," DIPAM secretary Arunish Chawla said.

Notably, the OFS marks the latest step in the government’s divestment efforts, following recent stake sales in PSUs like Coal India, NHPC, NLC India and more.

LIC share price

LIC shares plunged 9% on Tuesday after the OFS opened for non-retail investors. This marked the biggest single-day plunge recorded by the stock in more than two years. The stock has fallen over 8% in a week and 9% in a month, falling over 8% in 2026 so far.

In the longer term, LIC shares have delivered a negative return of 13% over one year, but gained around 19% in three years. The company has a market capitalisation of nearly Rs 4.94 lakh crore.

Also read | LIC shares sink 9% as OFS opens at 11% discount. Here's all you need to know

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)