Shares of General Insurance Corporation of India (GIC Re) fell nearly 6 percent on Tuesday after the Government of India launched an Offer for Sale (OFS) to divest up to a 5 percent stake in the company.
During the session, the stock slipped to Rs 364.70, compared with its previous close of Rs 388.35. GIC Re has a market capitalisation of Rs 63,947.88 crore.
OFS opens for institutional investors
The stake sale opened for non-retail investors on June 16, while retail investors can bid on June 17.
According to the Department of Investment and Public Asset Management (DIPAM), the floor price has been fixed at Rs 352 per share, representing a discount of about 9.3 percent to the previous closing price.
Structure of the offer
The OFS comprises:
- Base issue: 2 percent stake sale
- Greenshoe option: Additional 3 percent stake
If the entire 5 percent stake is sold, the government could mobilise around Rs 3,088 crore at the floor price.
The final issue price will depend on investor demand and could be higher than the floor price.
Government currently holds 82.4%
Before the OFS, the Government of India owned 82.4 percent of GIC Re.
According to exchange data:
- Retail investors held 1.4 percent.
- Non-retail investors held 0.14 percent.
Part of broader divestment plan
The latest stake sale forms part of the Centre’s ongoing disinvestment programme.
With the GIC Re OFS, total divestment proceeds are expected to cross Rs 15,000 crore within a month.
Recent stake sales have included:
- Coal India
- Central Bank of India
- NLC India
- NHPC
In the Union Budget 2026, the government set a disinvestment target of Rs 80,000 crore for FY27.
Finance Minister Nirmala Sitharaman has indicated that further divestments in central public sector enterprises will be considered.
March quarter performance
GIC Re reported a marginal decline in revenue during the March quarter.
Financial highlights
- Revenue fell 1.44 percent to Rs 13,018 crore, from Rs 13,209 crore a year earlier.
- Net profit increased to Rs 2,533 crore, compared with Rs 2,499 crore in the corresponding period.
Key ratios
The company reported:
- ROCE: 17.4 percent
- ROE: 14.6 percent
- Debt-to-equity ratio: 0
- PEG ratio: 0.56
- P/E ratio: 6.63
- Industry P/E: 42.2
- Price-to-book ratio: 0.96x
- Dividend payout ratio: 22.7 percent
About the company
Established under the General Insurance Business (Nationalisation) Act, 1972, GIC Re is India’s largest domestic reinsurer.
The company provides reinsurance support to 59 life and general insurers and operates across around 137 countries.
Its business spans several segments, including:
- Property insurance
- Agriculture and crop insurance
- Liability insurance
- Motor insurance
- Health insurance
GIC Re also has a strong presence in the Afro-Asian region and is one of the major players in the global reinsurance market.
TL;DR:
GIC Re shares dropped 6% after the Government of India launched an OFS to sell up to a 5% stake at a floor price of Rs 352 per share. The Centre could raise around Rs 3,088 crore if the issue is fully subscribed.
AI Summary:
- GIC Re shares fell 6% after the OFS announcement.
- The government is selling up to a 5% stake.
- The floor price has been fixed at Rs 352 per share.
- Retail investors can participate on June 17.
- The Centre currently holds 82.4% in the company.
