Government’s stake sale in Life Insurance Corporation (LIC) saw strong participation from institutional investors in the first leg of the Offer-for-Sale (OFS), with nearly two-thirds of the shares reserved for them subscribed by noon on Tuesday.Data available till midday showed institutional investors had bid for more than 18.81 crore shares, amounting to 66.10% of the institutional portion on offer. The bids came at an indicative price of Rs 382.07 per share, slightly above the floor price of Rs 382 fixed for the issue. The institutional window remains open until 3.30 pm on Tuesday, while retail investors will get an opportunity to participate on Wednesday.The Centre is divesting up to 6.5% of its holding in LIC through the OFS, offering more than 82.22 crore shares. Of these, over 28.46 crore shares have been earmarked for institutional investors. The transaction consists of a base issue of more than 31.62 crore shares, equivalent to 2.5% of the insurer’s total capital, along with a green shoe option of 50.60 crore shares, or 4% of the paid-up capital.At the floor price of Rs 382 a share, a fully subscribed offer would bring in around Rs 31,000 crore for the government’s disinvestment kitty. The floor price represents a 10% discount to LIC’s BSE closing price of Rs 424.35 on Monday.The proposed sale is also expected to help LIC comply with Sebi’s minimum public shareholding requirement ahead of the deadline. The regulator had allowed the insurer until May 16, 2027, to increase its public shareholding to at least 10%.The government currently holds a 96.5% stake in LIC. It had last diluted its holding in May 2022, when it sold a 3.5% stake through the insurer’s initial public offering at a price band of Rs 902-949 per share, raising about Rs 21,000 crore. Back in April, LIC’s board approved a 1:1 bonus issue.LIC shares declined during Tuesday’s trading session, slipping 7.03% from Monday’s close to Rs 394.50 on the BSE in afternoon trade. The insurer’s market capitalisation stood at more than Rs 4.98 lakh crore. With this transaction, the government continues to add to its disinvestment receipts. So far in the current financial year, it has mobilised Rs 21,082 crore through stake sales in seven public sector undertakings and remittances from SUUTI (Specified Undertaking of the Unit Trust of India).