GIC stake sale subscribed 3.72 times on Day One; green shoe option fully exercised
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The government’s offer for sale (OFS) of up to 5% stake in General Insurance Corporation of India (GIC) received strong demand from institutional investors on Tuesday, with the issue getting subscribed 3.72 times on the first day.
According to BSE data, non-retail investors bid for more than 11.73 crore shares against the base issue size of 3.16 crore shares reserved for them. At the indicative price of ₹352.92 per share, the bids received were valued at over ₹4,000 crore.
Following the robust response, the government decided to exercise the entire green shoe option.
“Offer for Sale in General Insurance Corporation of India received an enthusiastic response from investors on day one and was oversubscribed 3.72 times. Government has decided to exercise the entire green shoe option,” Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said in a post on X.
Retail investors will be able to participate in the OFS on Wednesday. Under the two-day OFS, the government initially offered to divest a 2% stake in GIC at a floor price of ₹352 per share, with an additional 3% available under the green shoe option, taking the total potential stake sale to 5%.
The total offer size translates into more than 8.77 crore shares. The floor price represented a discount of 9.36% to GIC’s closing price on Monday. Through the transaction, the government is expected to raise around ₹3,000 crore.
GIC shares ended Tuesday’s session 7.65% lower at ₹358.65 on the BSE.
With this transaction, the government continues to build on its disinvestment programme for the current fiscal. So far, it has mobilised ₹13,389 crore through stake sales in public sector undertakings (PSUs), including ₹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 government has set an ambitious target and aims to exceed the budgeted ₹80,000 crore from PSU disinvestment and asset monetisation during the current financial year.