Government Appoints Bankers and Legal Advisors for LIC Stake Sale; IDBI Bidder Likely by March

New Delhi, Aug 2, 2025: The Department of Investment and Public Asset Management (DIPAM) has completed the process of appointing merchant bankers and legal advisors to assist with the proposed stake sale in Life Insurance Corporation of India (LIC), according to DIPAM Secretary Arunish Chawla. The announcement marks a significant step in the government’s broader divestment strategy for key financial institutions.

Chawla also stated that the government expects to finalise the selection of a winning bidder for IDBI Bank by March. Financial bids for IDBI will be invited after October, with the government aiming to receive them by December. The central government, along with LIC, had invited expressions of interest in 2022 to sell their combined 60.72 percent stake in IDBI Bank — 30.48 percent from the government and 30.24 percent from LIC.

As for LIC, the government plans to divest 6.5 percent of its stake in the insurer over the next two years through multiple Offer for Sale (OFS) tranches. This divestment plan is part of an effort to comply with SEBI’s minimum public shareholding norms, which mandate that at least 25 percent of a company’s shares must be publicly held by May 16, 2027.

Currently, the government owns 96.5 percent of LIC, following a partial divestment of 3.5 percent during its 2022 initial public offering. The upcoming stake sale is projected to raise around ₹35,000 crore, helping bolster government revenues.

DIPAM has appointed merchant bankers on a three-year term, extendable up to five years. These bankers will be responsible for managing stake sales across all financial institutions, not just LIC, ensuring continuity and expertise in executing complex public offerings and compliance-driven divestments.

The move reflects a renewed push by the government to accelerate disinvestment from state-run enterprises while aligning with market regulations and long-term fiscal goals.