Shares of General Insurance Corporation of India Ltd (GIC Re) fell by 5.4% to a day’s low of Rs 398.60 today, marking the first day of the government’s sale of its 6.78% stake in the company via an offer for sale (OFS) at a floor price of Rs 395 per share.
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 floor price of the offer is set at Rs 395 apiece, a 6.23 per cent discount to Tuesday’s closing price.
The President of India, acting through and represented by the Ministry of Finance, informed stock exchanges about an announcement with respect to OFS of up to 5,95,12,000 equity shares of face value of Rs 5 each of the company.
Only non-retail investors can bid today. Retail investors, employees and non-retail investors, who choose to carry forward their un-allotted bids from T day, can bid on Thursday.
In an event of oversubscription, the government can additionally sell 5,95,12,000 (3.39 per cent) equity shares of the company. In that case, the base offer size and the oversubscription option will represent 11,90,24,000 (6.784 per cent) equity shares of the company, collectively.
“Additionally, 50,000 Equity Shares (equivalent to 0.04 % of the Offer Shares) may be offered to eligible employees of the Company, in accordance with the terms and conditions provided in the OFS Guidelines, subject to approval from the competent authority (the “Employee Offer”). The eligible employees may apply for Equity Shares amounting up to Rs. 500,000,” GIC Re said.
The offer will take place during trading hours on a separate window of the stock exchanges commencing at 9:15 am and will close at 3:30 pm IST.
As of June 30, 2024, the government held an 85.78 per cent 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 per cent so far this year, outperforming Nifty’s returns of 16 per cent. In the past 12 months, the counter has risen 86 per cent. In comparison, Nifty rose 29 per cent during this period.
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