GIC Re offer for sale subscribed 3.72 times on day 1; govt to offer additional 3% stake
The Indian government’s offer for sale (OFS) in General Insurance Corporation of India (GIC Re) received a strong response from investors as it was subscribed 3.72 times on Tuesday, the first day of bidding.
Arunish Chawla, secretary, Department of Investment and Public Asset Management (Dipam), said in a post on
On day one, OFS was open only to non-retail investors. Retail investors and eligible employees will be able to participate on Wednesday. The OFS route allows promoters to dilute their holdings in listed companies through a transparent sale based on the stock exchange.
The government currently holds an 82.4% stake in GIC, accounting for 1.45 billion shares. Based on Tuesday’s closing price ₹388.35, government holding is approx. ₹56,139 crore and total market capitalization ₹68,132 crore, according to Dipam portal. OFS base price ₹352 represents a discount of approximately 9.4% to the closing market price. The company is a major player in India’s insurance sector as a domestic reinsurer and also has a presence in many international markets.
The stake sale is part of the government’s broader disinvestment program aimed at increasing resources while improving public stakes in state-owned enterprises. At base price ₹352 per share, the government is expected to raise around 352 ₹1,230 crore from the base offer and up to ₹3,075 crore if the entire 5% stake is sold. Proceeds from the transaction will accrue to the Center and contribute to disinvestment proceeds for FY27.
make hay
The government appears to be accelerating its disinvestment program to boost non-debt capital returns at a time when market valuations remain positive, though not at peak levels, experts said.
Ranen Banerjee, partner and leader, economic consultancy, PwC India, said: “While market conditions remain supportive, the government is going to extreme lengths to mobilize non-debt capital proceeds. Preparatory work for various equity sales was ongoing in the last two fiscals, but there was little urgency to aggressively move forward with transactions as tax revenues remained strong.”
“Given the likely softness in tax revenues on both direct and indirect taxes front in FY27, the government is taking early action on the disinvestment and monetization fronts. This will help the government maintain its borrowing program to keep the pressure on bond yields in check and not borrow more than planned earlier in the fiscal,” Banerjee said.
The government has already taken action ₹13,389 crore in FY27 through minority stake sales in public sector enterprises. Receipts include: ₹5,542 crore from 2% OFS. Coal India Limited, ₹4,357 crore from 6.01% OFS in NHPC Limited, ₹2,266 crore from 8.08% OFS in Reserve Bank of India and ₹1,224 crore from 2.73% OFS in NLC India Limited.
