GIC Re shares falls 5% as govt to divest 6.8% stake in PSU insurer via OFS

As of June 30, 2024, the government held an 85.78 percent stake in the PSU insurer GIC Re, which is the largest company engaged in the reinsurance business.

Shares of General Insurance Corporation of India (GIC Re) are in focus on September 4 as the Centre looks to sell a nearly 7 percent stake in the company through the offer for sale (OFS) route. Government will divest 3.39 percent equity with an additional 3.39 percent stake as the green shoe option.

The OFS opens today for non-retail investors. Retail investors and GIC Re employees can bid on September 5. The equity shares can be subscribed between 9:15 am and 3:30 pm on both days. The floor price for the OFS would be Rs 395 per equity share.

The seller plans to offer up to 5.95 crore equity shares, each with a face value of Rs 5, representing 3.39 percent of the company’s total paid-up equity share capital, on September 4, 2024 (T day) for non-retail investors.

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The sale will continue on September 5, 2024 (T+1 day) for retail investors, employees, and non-retail investors who choose to carry forward their unallotted bids from T day, GIC Re stated in a BSE filing.

Additionally, there is an option to sell another 5.95 crore equity shares as part of the base offer, with oversubscription bringing the total offer to 11.90 crore shares, or 6.784 percent of the company’s equity, it added.

Around 50,000 equity shares (0.04 percent of the offer shares) may be offered to eligible employees of the company. The state-run insurer also mentioned that employees may apply for equity shares amounting up to Rs 5,00,000.

As of June 30, 2024, the government held an 85.78 percent stake in the PSU insurer which is the largest company engaged in the reinsurance business. This announcement came post-market hours on September 3. Earlier in the day, GIC Re shares settled 0.33 per cent lower at Rs 420.80. on the National Stock Exchange (NSE).

GIC Re stock has gained around 24 percent so far this year, outperforming Nifty's returns of 16 percent. In the past 12 months, the counter has risen 86 percent. In comparison, Nifty rose 29 percent during this period.

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