Possible Extension for LIC: More Time Expected to Comply with 25% Public Float Mandate

LIC May Be Given Additional Time to Comply with 25% Public Float Rule, Initial Discussions Underway in Finance Ministry

The Life Insurance Corporation of India (LIC) might receive an extension to adhere to the minimum 25% public float rule for its equity, as per a report. It is anticipated that LIC would require a period of five to seven years to issue more shares to the public, and the Finance Ministry is currently engaging in internal discussions on this matter.

According to a finance ministry official, LIC is an exceptional entity, and strict adherence to the norm by 2027 may be impractical. The appetite of investors and prevailing market sentiment need to be taken into consideration, necessitating a gradual increase in the float over time.

In May 2022, LIC initiated its divestment process by offering 3.5% of its equity through an initial public offering (IPO). However, the listing of LIC's shares resulted in an over 8% discount, generating Rs 20,557 crore for the exchequer. The government also possesses the authority to exempt any listed public sector company from the minimum public float requirements on a case-by-case basis, as stipulated in the amended Securities Contracts (Regulation) Rules, 1957.