LIC granted 3-year extension for public shareholding compliance

LIC has been granted a three-year extension by the Securities and Exchange Board of India to meet the minimum public shareholding requirement, allowing it until May 16, 2027, to achieve a 10 percent public shareholding. This extension comes after LIC, the largest life insurer in India, disclosed its current public shareholding of 3.5 percent as of March 31, 2024.

Following the announcement, LIC's stock saw a positive response, trading 3.3 percent higher at Rs 962.20 as of 10:53 am. To fulfill the requirement, the government needs to divest an additional 6.5 percent over the next three years.

The minimum public shareholding norms mandate that all listed companies maintain at least a 25 percent public float.

LIC initially went public in May 2022, with the government divesting a 3.5 percent stake through a Rs 21,000-crore issue, marking the largest IPO in the country at the time. Despite a challenging start, with the stock listing 9 percent lower than the upper price band, LIC shares began to recover from November 2023 onwards.

On February 8, LIC reported a 49 percent year-on-year rise in net profit at Rs 9,441 crore for the October-December quarter of the financial year 2023-24.

This extension provides LIC with more time to navigate the market and meet the regulatory requirements while continuing its operations and strategic initiatives.