LIC’s shares have surged by 58% over the past six months. Credit: Nisha Dutta/Shutterstock.

The Indian Government is considering a minority stake sale in General Insurance Corporation of India (GIC) and Life Insurance Corporation of India (LIC) in the 2024/25 financial year (FY24/25), reported Reuters, citing a government source.  

According to the source, “the government has received good feedback in investor roadshows for GIC, and is open to sell its 10% stake in tranches depending on its shares’ value”. 

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The sale of a 10% stake in GIC would occur over time, potentially raising around Rs57bn based on the closing price last week.  

GIC’s shares have seen a significant increase, rising around 45% in the past six months.  

As the sole reinsurer in India’s domestic market, GIC plays a crucial role by providing reinsurance to direct general insurance companies. 

For LIC, the government’s strategy remains to sell a 10% stake over seven years and a 25% stake within ten years following its 2022 listing, the source added. 

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However, these sales would be executed in “small” increments, taking into account the performance of LIC’s stock and investor demand.  

LIC’s shares have surged by 58% over the past six months.  

During LIC’s initial public offering, the government divested a 3.5% stake and had plans to sell an additional 1.5% to facilitate the insurer’s inclusion in index funds.  

“Any stake sale in LIC will be done in small tranches considering the large size of the offer,” the source stated.  

A 1.5% stake sale in LIC could yield around Rs92bn based on the stock’s closing price on 19 April 2023. 

An email sent to the country’s finance ministry seeking comment did not elicit a response.  

In other news from the Indian insurance sector, last week, Aon appointed Shailendra Sapra as the CEO of the company’s reinsurance solutions in India.  

Furthermore, this month saw Japanese insurance giant Nippon Life Insurance solidify its Indian market presence by establishing a new subsidiary, Nippon Life India, in Mumbai.