GIC Re OFS: Govt to sell 6.8% stake in insurer, floor price set at ₹395/share; Check key dates, share size

GIC Re OFS: The government will dilute up to 6.78 per cent stake in General Insurance Corporation (GIC Re) at a floor price of ₹395 per share. The offer for sale (OFS) for over 11.90 crore shares in the state-owned reinsurance company will open on Wednesday, September 4, for institutional investors. Retail investors will get to bid in the share sale offer on Thursday.

The central government will divest 3.39 per cent equity with an additional 3.39 per cent as a green shoe option in GIC Re. At the floor price of ₹395 a share, the share sale would fetch about ₹4,700 crore to the exchequer. 

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GIC Re OFS details

On September 3, shares of GIC Re settled 0.13 per cent lower at ₹421.25 apiece on the BSE. The floor price is at a discount of 6.23 per cent over Tuesday's closing price on BSE.

"Offer for sale in GIC opens tomorrow for Non-Retail investors. Retail investors and Employees of GIC can bid on Thursday. The government will divest 3.39 per cent equity with an additional 3.39 per cent as green shoe option," said DIPAM Secretary Tuhin Kanta Pandey in a post on microblogging platform ‘X’.

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According to the OFS, the government proposes to sell up to 5,95,12,000 equity shares (representing 3.39 per cent) on September 4 for non-retail investors only and on September 5 for retail investors. The government currently holds 85.78 per cent of GIC Re, which was listed on the bourses in October 2017 and garnered ₹9,685 crore from the initial public offering (IPO).

OFS means the promoters (owners) selling their shares to raise additional funds for the company. The green shoe option is a provision that grants the seller the right to sell investors more shares than initially planned by the issuer if the demand proves higher than expected.

GIC Re is a 100 per cent state-owned company that is designated as a national reinsurer and a leading player in the international reinsurance sector.

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