Govt launches GIC OFS at ₹352 per share, offers up to 5% stake sale at 9.1% discount
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The Government of India will open its Offer for Sale (OFS) in General Insurance Corporation of India (GIC Re) on June 16 for non-retail investors, with retail investors eligible to bid on June 17. Through the OFS, the Centre plans to divest a 2% equity stake in the state-owned reinsurer, while retaining the option to sell an additional 3% stake through a green-shoe mechanism in case of oversubscription.
The government has fixed the floor price at ₹352 per share, a discount of about 9.1% to GIC Re's previous closing price. The stake sale is part of the Centre's ongoing efforts to gradually reduce its holding in the company and move towards compliance with the Securities and Exchange Board of India's minimum public shareholding norms.
OFS opens in two phases
The share sale will open for non-retail investors on June 16, while retail investors will be able to place their bids on June 17. The government has fixed the floor price at ₹352 per share, representing a discount of around 9.1% to GIC Re's previous closing price.
Offer for Sale (OFS) transactions are typically used by the government to gradually reduce its holdings in listed public sector enterprises while ensuring broader investor participation. The inclusion of a green-shoe option provides flexibility to increase the size of the issue if demand exceeds the base offer.
Push towards minimum public shareholding norms
The divestment is part of the Centre's ongoing efforts to comply with the Securities and Exchange Board of India's (SEBI) Minimum Public Shareholding (MPS) norms, which require listed companies to maintain a prescribed level of public ownership.
The government currently remains the majority shareholder in GIC Re, and the latest stake sale is expected to move the company closer to the regulatory threshold. Increasing public shareholding is also viewed as a way to enhance stock liquidity, improve price discovery, and attract a wider base of institutional and retail investors.
GIC Re remains India's largest reinsurer and plays a critical role in providing reinsurance support to domestic insurers. The OFS marks another step in the government's calibrated divestment programme, balancing capital market development objectives with its commitment to retain management control in strategically important financial institutions.