LIC Share Update: Today there has been a rise in the shares of LIC. Actually SEBI (SEBI-Securities and Exchange Board of India) has given additional time of 3 years to LIC to fulfill the minimum public shareholding rule. At present the government has 96.5 percent stake in LIC. LIC will have to hold up to 25 percent public shares in the company by 2032.
Life Insurance Corporation of India (LIC-Life Insurance Corporation of India) has got relief from SEBI. SEBI has given additional time of 3 years to LIC to complete MPS (Minimum shareholding pattern). Earlier, the Finance Ministry had given 10 years time to LIC to fulfill the minimum public shareholding which is 25 percent.
Now the company will have to hold minimum public shareholding by May 2032. After the relief from SEBI (SEBI-Securities and Exchange Board of India), there was a rise in the shares of LIC. The company’s shares rose by 5 percent.
At the time of writing the news, LIC shares are trading at Rs 975.50 per share. It is expected that soon the shares of the company will become Rs 1000.
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Why did SEBI give relief to LIC?
According to SEBI rules, LIC has to fulfill the minimum public share holding norms of up to 25 percent. The government had sold shares worth more than Rs 22.13 crore through LIC’s IPO. This is approximately 3.5 percent stake of the company. After this, the government has 96.5 percent stake in the company.
According to SEBI rules, small investors should have a total stake of 25 percent in the company.
What is minimum public shareholding rule?
When a company is listed in the stock market, it has two shareholders. One is the owner or promoter of the company and the other is the public i.e. the investors who buy shares of the company.
Let us tell you that the people who are involved in promoting or starting a company are called promoters. According to SEBI rules, the promoter’s stake in the company can be more than 65 percent, but the common investor should have 25 percent stake. This means that the promoter’s stake should not exceed 75 percent.
Whenever the promoter’s stake in a company exceeds 75 percent, SEBI gives time to the company to fulfill the minimum public shareholding rule. The company has to do this work within this time. If the company does not complete this work within time then SEBI can take action against them.
