Govt to Sell Up to 5% Stake in GIC via OFS at Rs 352 Per Share

The Indian government is set to divest its holdings in the General Insurance Corporation of India (GIC) through an Offer for Sale (OFS) starting June 16. This strategic move is part of the Centre's ongoing efforts to meet its ambitious disinvestment targets for the current fiscal year.

Details of the GIC Offer for Sale

The Department of Investment and Public Asset Management (DIPAM) has announced that the OFS will open for institutional investors on Tuesday, June 16. Retail investors will have the opportunity to participate in the bidding process starting Wednesday.

According to DIPAM Secretary Arunish Chawla, the government is initially divesting a 2% equity stake in GIC. However, a green shoe option is in place, allowing for the sale of an additional 3% stake if market demand permits, bringing the total potential divestment to 5%.

Pricing and Revenue Projections

The government has set a floor price of Rs 352 per share for the OFS. This price represents a discount of 9.36% compared to Monday's closing market price of Rs 388.35 on the BSE.

By selling more than 8.77 crore shares at this floor price, the exchequer is expected to mobilize approximately Rs 3,000 crore. This infusion of capital is critical as the government works toward its broader fiscal objectives.

Tracking India's Disinvestment Momentum

The GIC stake sale comes at a time when the government is aggressively pursuing PSU disinvestment. So far in the current financial year, the Centre has already successfully mobilized Rs 13,389 crore through various stake sales.

Key contributors to this figure include:

These divestments are part of a larger roadmap to surpass the budgeted target of Rs 80,000 crore aimed at PSU disinvestment and asset monetisation for the current fiscal year.

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