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The GIC of India IPO is the latest in a line of insurance firms, ICICI Lombard and SBI Life Insurance, that have filed IPO papers to go public. Photo: Abhijit Bhatlekar/Mint
The GIC of India IPO is the latest in a line of insurance firms, ICICI Lombard and SBI Life Insurance, that have filed IPO papers to go public. Photo: Abhijit Bhatlekar/Mint

GIC of India files for IPO to raise Rs10,000 crore

The IPO of General Insurance Corporation of India (GIC of India) will see total stake dilution of 14.22%, according to the DRHP submitted to Sebi

Mumbai: State-owned reinsurance company General Insurance Corp. of India (GIC) on Monday filed the draft red herring prospectus (DRHP) for its initial public offering (IPO).

The IPO will see a total stake dilution of 14.22%, according to the DRHP available on the website of one of the investment banks managing the share sale.

GIC has appointed investment banks Citigroup, Axis Capital, Deutsche Bank, HSBC and Kotak Mahindra Capital Co. Ltd to manage the public offering.

The IPO is likely to raise over Rs10,000 crore, at least two people aware of the plans said, requesting anonymity.

The government plans to sell 107.5 million shares in the IPO, while the company will issue around 17.2 million new shares to raise primary capital.

GIC intends to use the primary proceeds for augmenting its capital base to support the growth of its business and to maintain current solvency levels and for general corporate purposes, according to the DRHP.

On 27 July, Mint reported that GIC was gearing up to file its draft IPO prospectus with an eye on launching its initial share sale in October or November.

If GIC goes for a Rs10,000-crore IPO, it will be the second largest public offering in India. In 2010, state-owned company Coal India Ltd had set the record for India’s largest IPO, raising Rs15,200 crore.

GIC’s initial share sale is part of the Union government’s divestment plan, under which the department of investment and public asset management has appointed bankers to sell government stakes across over a dozen public sector enterprises through various routes such as IPOs, offers for sale and strategic sales.

The list of companies where the government is looking to pare its stake include railway subsidiaries Rail Vikas Nigam Ltd, Ircon International Ltd, Indian Railway Finance Corp. Ltd, Indian Railway Catering and Tourism Corp. Ltd (IRCTC) and RITES Ltd.

The filing of GIC’s DRHP also comes at a time when the capital market is expected to see a flurry of insurance IPOs.

Last month, SBI Life Insurance Co. Ltd filed the draft red herring prospectus for its IPO. The issue will see State Bank of India and BNP Paribas sell 80 million and 40 million shares, respectively, amounting to a combined 12% stake. The SBI Life IPO is expected to raise around Rs6,000-7,000 crore.

On 14 July, ICICI Lombard General Insurance Co. Ltd, the non-life insurance joint venture of ICICI Bank Ltd and Fairfax Financial Holdings Ltd, filed its DRHP.

Another state-owned insurance firm New India Assurance Co. Ltd is also expected to file its draft IPO document soon.

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