New Delhi: Shares of Life Insurance Corporation of India (LIC) traded lower on Thursday after the government raised Rs 31,552 crore through an Offer for Sale (OFS), fully exercising the green shoe option and enabling the state-run insurer to achieve the mandatory 10 per cent minimum public shareholding ahead of the regulatory deadline.

The Department of Investment and Public Asset Management (DIPAM) said the OFS was oversubscribed on both days of bidding, with 82.23 crore shares allocated to retail and institutional investors.

In a post on the social media platform X, DIPAM stated that the OFS in LIC closed with a strong response from both retail and institutional investors. “With this the public ownership of LIC has increased to 10 per cent and it has achieved this critical milestone ahead of schedule. A total of 82,23,33,558 shares have been allocated for an amount of Rs 31,552 crore, making it India’s largest public offering ever,” it said.

The transaction is also the largest public offering in India’s capital markets by issue size.

The government had initially offered to sell a 2.5 per cent stake in LIC, with a green shoe option of up to 4 per cent in the event of strong demand. The floor price for the OFS was fixed at Rs 382 per share. Robust investor interest allowed the government to fully exercise the green shoe option, increase the size of the offer and raise public shareholding in LIC to 10 per cent, in line with minimum public shareholding norms.

The OFS opened for non-retail investors on August 4, while retail investors bid on Wednesday. DIPAM thanked participants, saying the response reflected confidence in LIC and the government’s disinvestment programme.

LIC, India’s largest life insurer, was listed on the stock exchanges in May 2022 after the government diluted a portion of its stake through an initial public offering. The latest OFS further reduces the Centre’s holding while bringing the insurer into compliance with the Securities and Exchange Board of India’s minimum public shareholding requirement.

On Thursday, shares of LIC were trading lower at Rs 387.25 on the NSE in early trade, down more than 1 per cent and hitting an intraday low.

The successful completion of the OFS marks a significant step in the government’s ongoing disinvestment process and in aligning LIC’s shareholding structure with regulatory norms.