LIC shares extend fall on stake-sale buzz; insurance stock down 6% in three sessions

Shares of Life Insurance Corporation (LIC) of India extended their losing streak for the third consecutive session on Monday amid reports that the government is planning to divest around a 2% stake in the country's largest insurer.

LIC shares fell as much as 1.93% intraday to ₹403.50 on the BSE. At the time of reporting, the PSU stock was trading at ₹407.85, down 0.9%, with a market capitalisation of ₹5.15 lakh crore.

Over the past three trading sessions, the insurance heavyweight has declined nearly 6% as investors turned jittery over reports of a potential stake sale by the government.

The share price of LIC touched its 52-week high of ₹490.03 on June 30, 2025, and a 52-week low of ₹361 on April 2, 2026. Last week, the state-run insurer completed its maiden 1:1 bonus issue on May 29, issuing one bonus share for every existing share held.

Govt may raise around ₹10,000 crore via stake sale

The Centre is considering selling around a 2% stake in LIC to institutional investors, potentially raising close to ₹10,000 crore, according to a Bloomberg report. The proposed transaction is expected to take place in late June or early July.

The Department of Investment and Public Asset Management (DIPAM) is reportedly working with Goldman Sachs Group, Motilal Oswal Investment Advisors, BNP Paribas, and IIFL Capital Services to manage the stake sale, the report said.

LIC was listed in May 2022 after the government sold a 3.5% stake in the insurer, raising around ₹21,000 crore. As of March 31, 2026, the government continued to hold a 96.5% stake in the company, according to exchange data.

Under Securities and Exchange Board of India (SEBI) regulations, listed companies are required to maintain a minimum public shareholding of 25%. LIC has been granted a 10-year timeline from its listing date to achieve this threshold, giving the insurer until May 2032 to comply.

The proposed LIC stake sale comes amid an accelerated disinvestment drive by the government. In recent weeks, the centre has monetised stakes in two state-owned enterprises through the offer-for-sale (OFS) route.

Last week, the government sold an 8.08% stake in Central Bank of India , raising ₹2,266 crore. The issue included a 4% base offer and a 4% greenshoe option, which was exercised following strong investor demand.

The Centre also offloaded a 2% stake in Coal India , garnering nearly ₹5,000 crore.

These transactions are part of the government's broader objective of raising ₹80,000 crore through disinvestment and asset monetisation during FY27.

LIC concluded FY26 on a strong note, with profit after tax (PAT) rising 19.25% year-on-year (YoY) to ₹57,419 crore, driven by higher premium income, strong growth in non-par products, and improving margins. The country's largest life insurer also announced its maiden 1:1 bonus issue and a final dividend of ₹10 per share for FY26.

The PSU insurer reported total premium income of ₹5,35,984 crore for FY26, up 9.8% from ₹4,88,148 crore in the previous financial year, according to its exchange filing.

The value of new business (VNB) jumped 41.63% to ₹14,179 crore, while the VNB margin improved by 360 basis points to 21.2%, reflecting a favourable product mix and a higher contribution from non-par products.

LIC's individual non-par annualised premium equivalent (APE) rose 43.78% to ₹15,214 crore during FY26, increasing the non-par share in the individual business mix to 35.11% from 27.69% a year ago. Overall APE grew 17.83% YoY to ₹66,961 crore, supported by strong growth across both individual and group businesses.

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