Reinsurer GIC To Launch India’s Biggest IPO Since 2010

General Insurance Corporation of India is looking to raise Rs 11,370 crore in India's largest initial public offering in seven years as the government begins to pare its stake in state-run general insurers amid a stock market rally.

The reinsurer will sell shares at Rs 855-Rs 912 apiece in the three-day offer the opens on October 11. The IPO will value the company at Rs 80,000 crore at the upper end.

The share sale will be the biggest after Coal India Ltd. raised Rs 15,200 crore in 2010. The government is looking to sell part of its stake in insurers as it looks to meet its Rs 72,000 crore divestment estimates amid worries around breaching the 3.2 percent fiscal deficit. Besides GIC, New India Assurance has also received the market regulator's approval for an IPO.

Overall, the company will sell 12.47 crore shares or 14.22 percent of the post-issue paid up share capital. Citi, Axis Capital, Deutsche Bank, HSBC and Kotak Investment Banking are the book-runners for the offer.

India's largest reinsurer will offer a discount of Rs 45 per share for retail investors and employees, it said in a advertisement published on October 4.

The government will sell nearly 12.2 percent stake through the sale of 10.75 crore shares worth Rs 9,804 crore while the company will sell another 1.72 crore shares worth Rs 1,568 crore to mop up funds for improving its capital base and general corporate purposes, according to its red herring prospectus.

The maiden offer comes even as the reinsurer is looking to increase its presence in the international market through a syndicate formed with U.K. reinsurance marketplace Lloyd's which will materialise by the next year. GIC will look to grow its proportion of gross premium collected from the overseas market from 30 percent to 40 percent in the short to medium term, Alice G Vaidyan, chairman and managing director, told BloombergQuint.