LIC shares fall 8% after government announces OFS

Shares of the Life Insurance Corporation of India (LIC) fell sharply on Tuesday, August 4, 2026, following the government's announcement of a discounted stake sale. The stock declined by approximately 8 to 9 percent on the National Stock Exchange, opening at Rs 392 compared to the previous day's close of Rs 428.50.

The decline coincided with the opening of a two-day Offer for Sale (OFS) for non-retail investors. The government is selling up to a 6.5 percent stake in the state-owned insurer, with a floor price set at Rs 382 per share. This price represents a discount of roughly 10 to 11 percent to LIC's closing price on Monday, August 3. Market analysts attributed the stock's immediate drop to this discount, which creates near-term price pressure as a large volume of shares enters the market at a lower valuation.

The sale structure involves an initial offering of a 2.5 percent stake, with an option to sell an additional 4 percent through a "green shoe" option if demand is strong. Retail investors will be able to participate in the bidding on Wednesday, August 5. Officials reported that the institutional portion of the sale was oversubscribed by 3.32 times its base size, prompting...