GIC OFS: Govt To Sell 3% More Stake In Insurer Via Green Shoe Option

Following strong investor demand that saw General Insurance Corporation of India's offer for sale oversubscribed 3.72 times on the first day, the government has decided to exercise the full green shoe option and sell an additional 3% stake in the state-owned reinsurer.

According to a post by DIPAM Secretary Arunish Chawla on X, General Insurance Corporation of India's Offer for Sale received strong interest from institutional investors and was oversubscribed 3.72 times on the first day, prompting the government to exercise the full green shoe option and increase the issue size.

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The government had initially proposed to sell a 2% stake in GIC Re through the OFS, with an option to offload an additional 3% stake under the green shoe mechanism in case of robust demand. With the exercise of the entire green shoe option, the total stake sale will now rise to 5%.

The offer opened for non-retail investors on Tuesday and witnessed strong participation, reflecting continued investor interest in public sector insurance companies. Retail investors and eligible employees will be able to place bids on Wednesday, June 17.

The stake sale forms part of the government's broader disinvestment programme aimed at improving public ownership in listed state-run companies and meeting minimum public shareholding requirements.

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GIC Re, India's largest reinsurer, plays a key role in providing reinsurance support to domestic insurers and has remained a key player in the country's insurance ecosystem. 

The successful response to the OFS is expected to support the government's divestment efforts while enhancing liquidity in the stock.

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