Shares of General Insurance Corporation of India (GIC Re) fell over 4% to an intra-day low of Rs 400.95 as the Indian government initiated the sale of nearly 7% of its stake in the company through an offer for sale (OFS) route.
The government plans to divest 3.39% equity, with an additional 3.39% stake available as a green shoe option.
OFS Details and Timelines
The OFS opened today for non-retail investors, with retail investors and GIC Re employees allowed to 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 is set at RS 395 per equity share.
Share Allocation and Green Shoe Option
The seller intends to offer up to 5.95 crore equity shares, each with a face value of Rs 5, representing 3.39% of the company’s total paid-up equity share capital, on September 4, 2024 (T day) for non-retail investors.
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, according to a filing by GIC Re with the BSE.
Additionally, the government has the option to sell another 5.95 crore equity shares as part of the base offer. If oversubscribed, the total offer could reach 11.90 crore shares, or 6.784% of the company’s equity.
Employee Participation and Current Govt Holding
Around 50,000 equity shares (0.04% of the offer shares) may be offered to eligible employees of the company. The state-run insurer also noted that employees may apply for equity shares up to Rs 5,00,000.
As of June 30, 2024, the government held an 85.78% stake in GIC Re, the largest company engaged in the reinsurance business in India. This announcement was made after market hours on September 3.
Stock Performance In Last One Year
GIC Re shares have delivered positive returns across various time frames. Over the last month, the stock has shown a positive return of 4.17%, indicating short-term growth. In the last six months, the performance has impressive, with a substantial increase of 1%, showcasing the stock’s resilience and upward momentum.
Year-to-date, GIC Re shares have surged by 28.82%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 77.77%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.