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Slew of PSU stake sales soon; govt plans to divest 6.5% in LIC in tranches
The government plans to divest a 6.5 per cent stake in Life Insurance Corporation (LIC) of India in tranches over the next 24 months, while kicking off a slew of share sales in central public-sector enterprises (CPSEs) this financial year to meet the stock market regulator's minimum public shareholding (MPS) mandates.
'This year, we will follow a strategy of regular offers for sale (OFS) in small tranches. We are officially giving forward guidance for small investors to look out for it,' Department of Investment and Public Asset Management (Dipam) Secretary Arunish Chawla told Business Standard in an interview.
While most CPSEs are now compliant with the MPS norms that require at least 25 per cent of public shareholding for listed firms, a few firms in sectors like defence, railways, and the financial sector are still lagging. 'We are actively pursuing their disinvestment. Hopefully, within the next one year, we would like them to achieve MPS norms,' he stressed.
The deadline for five public-sector banks like Bank of Maharashtra and UCO Bank to meet the 25 per cent public shareholding mandate is August 2026, while the Securities and Exchange Board of India (Sebi) has permitted LIC to raise its public stake to 10 per cent by May 16, 2027. The insurance behemoth was listed in May 2022 with a 3.5 per cent dilution of the government's stake.
'We will do this (LIC) disinvestment in small tranches, keeping in mind the liquidity conditions and the need to give small investors a fair chance to participate,' the secretary said. Diluting a 6.5 per cent stake in LIC would fetch the Centre ₹35,256 crore according to its current market price.
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