LIC Receives 10-Year Exemption for Minimum Public Shareholding

Life Insurance Corporation (LIC) has secured a one-time exemption from the Department of Economic Affairs, allowing the insurance giant to extend its Minimum Public Shareholding (MPS) target to 25% by May 2032.  This unprecedented decision follows LIC's stock market debut in May 2022, marked by the largest Initial Public Offering (IPO) in India's history, raising over ₹21,000 crore. LIC's IPO, a monumental event in May 2022, still holds the record as the country's largest in terms of size. Despite a recent stock price surge, currently trading at ₹815, LIC remains 15% below its IPO price of ₹949.

SEBI's Rule Modification

SEBI's 2021 rule adjustment impacts issuers with a post-issue market capital exceeding ₹100,000 crore. LIC, falling into this category, must now meet the 10% public shareholding requirement within two years and attain 25% within five years from the date of listing. Earlier this year, the government exercised its authority, signaling the potential exemption of listed public sector enterprises from MPS norms, a move directly affecting LIC. Originally mandated to achieve the 25% MPS rule by 2027, LIC now benefits from a 10-year extension, aligning its deadline with May 2032.

Market Performance

LIC's shares increased 35% over the last month, with December alone contributing over 20% to this surge. This month stands out as LIC's best since becoming a public entity in May last year.
LIC's stock is doing well. In the last month, it went up by 32%, and today alone it gained 5%. Zooming out to the past six months, it surged by 25%. And if you look at the whole year, investors got an 18% return. Government currently holds a 96.5% stake in LIC.

LIC Holding in Tata Motors & Dixon 

Life Insurance Corporation of India (LIC) revealed on Tuesday that its stake in Tata Motors Limited has dropped from 5.110% to 3.092% of the company's paid-up capital. This reduction, from 169,802,847 to 102,752,081 equity shares, represents a 2.018% decrease between August 28, 2015, and December 18, 2023. The average cost of acquisition during this period was Rs 711.65.

Before this, LIC had also reported a decrease in its shareholding in Dixon Technologies India Limited from 5.012% to 3% of the paid-up capital, corresponding to a reduction from 29,97,913 to 17,94,395 equity shares.