The shares were sold through open market transactions during the period from December 21, 2020, to August 8, 2022, according to a regulatory filing.
After the sale, the LIC holding in the passenger cars and utility vehicles company decreased from 8.430 per cent to 6.421 per cent, it said.
The average cost of 2,49,73,233 shares sold, it said, was ₹889.95 crore.
Under Sebi norms, listed companies are required to intimate the stock exchanges when their shareholding in an entity changes by 2 per cent or more.
On the BSE, shares of LIC rose 0.39 per cent to close at ₹682.65 apiece while that of Mahindra and Mahindra fell 0.46 per cent to ₹1,269 apiece.