LIC's IPO is expected to hit the market in the first week of May.
Board has also approved reducing the size of the issue.
The government has now decided to dilute 3.5% stake for Rs 21,000 crore, compared to the proposed 5% on the draft paper.
Even after reducing it to Rs 21,000 crore, the LIC IPO is set to become the largest IPO in the country.
Til now, Paytm's IPO is the biggest IPO at Rs 18,300 crore.
Retail investors will be eligible to participate in approximately 35% of the IPO issue size.
About 15% will be reserved for non-institutional investors.
About 50% will be reserved for qualified institutional buyers (QIBs).