PSU stock in focus after Govt plans to sell 2-3% stake in the company

Introduction:

PSU stock is set for 2-3% stake divestment in 2025-26 as part of the government’s plan to reach 10% public shareholding by 2027. The sale will be executed in small tranches, aligning with market conditions to maximize value and meet regulatory requirements.

Share Price movement of Life Insurance Corporation:

On March 12, 2025, Life Insurance Corporation of India opened at ?760.00, reaching a high of ?761.65, up 0.98% from its previous close of ?754.25 and low of ?738.90,. The stock currently trades at ?740.60, with a market cap of ?4,68,429.33 crore.

About Life Insurance Corporation:

Life Insurance Corporation (NSE: LICI) is India’s largest insurer, offering a wide range of life insurance, pension, and investment products. A government-owned entity, LIC plays a crucial role in the financial sector, managing significant assets and ensuring long-term financial security for policyholders.

Govt plans to sell 2-3% stake of LIC:

The central government plans to divest 2-3% of its stake in Life Insurance Corporation (LIC) during 2025-26, aiming to achieve a 10% public shareholding by 2027. Depending on market conditions, the sale is expected to be conducted in multiple small tranches to optimize valuation.

The Ministry of Finance’s DIPAM had earlier invited bids from merchant bankers and legal advisers to facilitate the sale of minority stakes in PSBs and financial institutions, including LIC. This move is part of a broader divestment strategy planned over the next three years.??

LIC received a three-year extension from SEBI to comply with the 10% public shareholding requirement by May 16, 2027. SEBI mandates all listed firms to maintain a 25% public float, but newly listed entities get a three-year window to meet the requirement.

Stock performance of Life Insurance Corporation for Period of 1 week, 6 months and 1 year:

Life Insurance Corporation’s stock declined by 0.99% over the past week, reflecting minor short-term weakness. In the last six months, it dropped 27.1%, indicating sustained selling pressure. Over the past year, it fell 23.5%, highlighting ongoing volatility and underperformance in the market.

Shareholding pattern of Life Insurance Corporation:

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