LIC got big relief, shares jumped 5 percent after SEBI's decision

SEBI has given Life Insurance Corporation of India (LIC-Life Insurance Corporation of India) some relief. For LIC to finish MPS (Minimum shareholding pattern), SEBI has granted an extra three years. The Finance Ministry had earlier given LIC ten years to fulfill the required minimum public shareholding of twenty-five percent.

The minimum public shareholding that the company must hold by May 2032 has been mandated. Shares of LIC increased following SEBI's (Securities and Exchange Board of India) relief. The stock price of the company increased by 5%.

LIC shares are trading for Rs 975.50 a share at the time this news article was written. The company's shares are anticipated to increase in value to Rs 1000 shortly.

According to SEBI rules, LIC has to meet the minimum public shareholding 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 a 3.5 percent stake in the company. After this, the government has a 96.5 percent stake in the company.

According to SEBI rules, small investors should have a total stake of 25 percent in the company.

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.

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.