How the government plans to reduce its LIC Share Price holding from 96.5% to 75% by 2027, what it means for customers, banks, and investors, and how it could bring efficiency and trust to these institutions.
There’s a big update that’s making rounds today—clear, simple and important, whether you’re an LIC policy holder, a customer of a PSU bank, or just keeping an eye on government changes.
What’s Happening with LIC’s Government Stake?
Right now, the Centre owns a whopping 96.5% of Life Insurance Corporation of India (LIC)—a holdover from its 2022 IPO where just 3.5% was floated. That means almost all of LIC remains firmly under government hands.
But under the stock market rules set by SEBI, promoters—including governments—can’t hold more than 75% ownership if a company is listed. LIC now has until May 2027 to bring it down.
Also Read – Selling Notes Online 2025.
What About Government Banks?
It’s not just LIC. The same rules apply to several public sector banks where the government still holds more than 75%. Here’s how the list looks:
Indian Overseas Bank – 94.61%
UCO Bank – 90.95%
Punjab & Sind Bank – 93.85%
Central Bank of India – 89.27%
Bank of Maharashtra – 79.60%
Only Bank of Maharashtra is on track to meet the deadline. The others might ask for extensions to comply by August 2026.
Why Is This Being Done?
Well, it’s about following the rules—and more than that, it brings some real benefits:
- Stronger government finances: Selling some stake raises money without burdening taxpayers.
- Better governance: More public and private investors means more oversight, efficiency, and muscle in decision-making.
- Stronger banks and insurers: Public participation can spark healthy competition, innovation, and faster improvements in customer service.
It’s a smart move that blends fairness with practicality.
What Happens to Customers?
Good news. If you’re holding an LIC policy or have an account in one of these banks, nothing changes for you:
All existing policies and services remain safe—no changes in benefits or coverage.
You might even notice better, faster service, thanks to added market pressure and fresh ideas at the top.
So, stay calm and keep enjoying the same support.
Step-By-Step Look at the Timeline
Here’s a quick overview:
| Timeline | What’s Happening |
| May 2027 | LIC must reduce government stake to 75%. |
| August 2026 | Government banks must comply—or apply for extension. |
| Between now and then | The government invites bids, sets up roadshows, hires merchant bankers, and sells stakes in phases. |
LIC may sell through Offer For Sale (OFS) or Qualified Institutional Placements (QIP), in small chunks rather than all at once.
FAQs:
Will LIC policies get affected?
Nope. Your policy stays just as secure. Ownership changes don’t affect customer rights.
Should I worry about bank services?
No. Service stays safe, and things may even get faster as efficiency improves.
Why must the government sell so much stake?
It’s the law—SEBI rules say only up to 75% promoter holding is allowed in listed companies.
Will this impact LIC’s stock price?
There was a 3% dip when news broke about a 2.5–3% tranche sale, but LIC remains profitable, which keeps overall confidence stable.
How much money could be raised?
A 2.5–3% sale of LIC could rake in anywhere between ₹14,000 crore to ₹17,000 crore—a big boost to the public kitty.
Final Thoughts—What This Means Going Ahead
This stake reduction is about making things fairer, stronger, and more flexible. The government is stepping aside a bit—not withdrawing from control—but making room for public ownership and better governance.
For you as a customer, it means business as usual with a healthy bonus — potential improvements in efficiency, choices, and transparency.
Over the next couple of years, we’ll see more updates as LIC and these banks gradually meet SEBI rules—keeping us all up to date.
[…] Also Read – LIC Share Price At Stake 2025. […]