India is preparing a new stake sale in Life Insurance Corporation of India, the country’s state-run insurance giant. According to Bloomberg, the government may begin formal marketing in June and could sell about 2% of LIC to institutional investors in late June or early July. The transaction may raise as much as 100 billion rupees, or roughly $1 billion.

The deal has not been formally announced, so the timing, size and final structure could still change. But the rationale is clear. After LIC’s 2022 IPO, the Indian government still owned 96.5% of the insurer as of March 31. LIC has until May 2032 to meet SEBI’s minimum 25% public shareholding requirement, meaning more gradual stake sales are likely over time.

For investors, the signal is mixed. A larger free float could improve liquidity and help broaden institutional ownership in one of India’s most important financial companies. But a near-term share sale can also pressure the stock by adding supply to the market. LIC shares fell as much as 4% after reports of the planned transaction. The key variables now are pricing, discount size and whether domestic and foreign funds show enough demand for another large Indian equity offering.