Govt's 5% GIC Re offer for sale fully subscribed; boosts FY27 divestment drive

The government's offer for sale (OFS) of a 5% stake in state-owned reinsurer General Insurance Corporation of India (GIC Re) was fully subscribed on Wednesday, with investors taking up both the 2% base offer and the 3% greenshoe option, according to the Department of Investment and Public Asset Management (Dipam).

The government held 82.4% in GIC Re before the share sale. Following the divestment, its stake is expected to decline to about 77.4%, meaning it comfortably retains majority ownership in the company.

“Offer for sale in GIC Re closed with enthusiastic response from the investors. Government of India has divested 5.0% stake in GIC Re with full subscription of base and greenshoe offer,” Dipam secretary Arunish Chawla wrote in a post on X.

The total proceeds from the OFS are yet to be disclosed. The offer was conducted through the stock exchange mechanism, under which the final price is discovered through bids received from institutional and non-institutional investors.

The transaction marks another step in the Centre's FY27 disinvestment programme and signals continued investor interest in public sector financial services companies amid a broader re-rating of PSU stocks. The deal reflects the government's increasing reliance on minority stake sales in listed central public sector enterprises to generate non-tax revenue while retaining management control.

The Centre has set an ambitious target of raising ₹80,000 crore through disinvestment and asset monetisation in FY27. It has already garnered ₹19,756.35 crore of this— ₹13,389.42 crore through disinvestment and ₹6,366.93 crore through asset monetization.

Stock drops 9%

The completion of the OFS came against the backdrop of a sharp selloff in GIC Re shares. The stock fell nearly 9% from Tuesday's close of ₹388.35 to ₹353.50 on Wednesday. The drop reduced the market value of the government's stake by about ₹5,000 crore. At Wednesday's closing share price of ₹353.50, GIC Re's market capitalisation stood at about ₹62,018 crore. The government's stake in the company was valued at more than ₹51,000 crore.

Based on the floor price of ₹352 per share, the government was expected to raise around ₹1,230 crore from the base offer, and about ₹3,075 crore from the total 5% stake sale.

The transaction comes as the government increasingly relies on minority stake sales in listed central public sector enterprises to generate non-tax revenue while retaining management control.