GIC OFS subscribed 3.72 times on day one, government exercises full green shoe option

The government’s offer for sale (OFS) of up to 5 per cent stake in General Insurance Corporation of India witnessed strong institutional demand on Tuesday, with the issue getting subscribed 3.72 times on the first day of bidding.

According to BSE data, non-retail investors placed bids for more than 11.73 crore shares against the base issue size of 3.16 crore shares reserved for them. At the indicative price of Rs 352.92 per share, total bids were valued at over Rs 4,000 crore, signalling robust appetite from institutional investors.

Government exercises full green shoe option

Following the strong response, the government decided to fully exercise the green shoe option, increasing the total divestment size of the OFS.

“Offer for Sale in General Insurance Corporation of India received an enthusiastic response from investors on day one and was oversubscribed 3.72 times. Government has decided to exercise the entire green shoe option,” Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said in a post on X.

Structure of the OFS

Under the two-day OFS, the government initially planned to divest a 2 per cent stake, with an additional 3 per cent available under the green shoe option, taking the total potential stake sale to 5 per cent.

The combined offer translates into more than 8.77 crore shares. Based on current estimates, the transaction is expected to raise around Rs 3,000 crore.

Price band and market reaction

The floor price for the OFS was set at Rs 352 per share, representing a discount of 9.36 per cent to the previous closing price.

However, shares of General Insurance Corporation of India ended Tuesday’s session at Rs 358.65 on the BSE, down 7.65 per cent.

Retail participation opens

Retail investors will be able to participate in the OFS on Wednesday, the second day of the two-day bidding window.

Part of broader disinvestment push

With this transaction, the government continues to strengthen its disinvestment programme for the current financial year. So far, it has raised Rs 13,389 crore through stake sales in public sector undertakings, including Coal India, NHPC, Central Bank of India, and NLC India.

The Centre has set a target of over Rs 80,000 crore through PSU disinvestment and asset monetisation in the current fiscal year.