Govt raises about ₹3,000 crore through 5% GIC Re stake sale; FY27 PSU disinvestment proceeds near ₹16,000 crore

The government on Wednesday said it has successfully divested a 5% stake in state-owned reinsurer General Insurance Corporation of India (GIC Re), with the offer for sale (OFS) receiving strong investor interest.

The transaction is expected to fetch around ₹3,000 crore for the exchequer and takes the government's total proceeds from five public sector disinvestment transactions in the current fiscal to nearly ₹16,000 crore.

Investor appetite remains strong despite discount

Non-retail investors had fully subscribed to the OFS on Tuesday, putting in bids worth around ₹4,000 crore. The issue was opened for retail investors on Wednesday.

"Offer for Sale (OFS) in GIC Re closed with enthusiastic response from the investors. Government of India has divested 5% of its stake in GIC Re with full subscription of base and green-shoe offer," Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said in a post on X.

Under the two-day OFS, the government offered to sell a 2% equity stake in GIC Re, along with a 3% greenshoe option, resulting in a total dilution of 5%. The sale involved more than 8.77 crore shares and was launched at a floor price of ₹352 per share.

The floor price represented a discount of 9.36% to Monday's closing price. Following the announcement, GIC Re shares ended 7.65% lower at ₹358.65 apiece on the BSE.

Disinvestment tally gains momentum

The latest transaction further strengthens the government's disinvestment programme for FY27. Prior to the GIC Re sale, the Centre had mobilised ₹13,389 crore through stake sales in four public sector enterprises.

These included ₹5,542 crore from Coal India, ₹4,357 crore from NHPC, ₹2,266 crore from Central Bank of India and ₹1,223 crore from NLC India.

The successful completion of the GIC Re OFS suggests that investor appetite for quality public sector companies remains intact despite broader market volatility and valuation concerns.

₹80,000 crore target in focus

The government has already lined up a pipeline of stake sales and asset monetisation initiatives and is aiming to surpass the budgeted target of ₹80,000 crore from disinvestment and asset monetisation during FY27.

Unlike previous years, where strategic sales formed a key component of the programme, the government has increasingly relied on market-based stake dilution through OFS transactions to unlock value while maintaining management control in key state-owned enterprises.

According to industry observers, the successful GIC Re stake sale adds to a steady stream of PSU disinvestments undertaken this fiscal and is expected to provide further momentum to the government's capital-raising plans. (With Inputs from PTI)