GIC Re shares in focus as 2-day OFS kick starts today; floor price discount, other details

Shares of General Insurance Corporation of India Ltd (GIC Re) are in focus on Wednesday morning as the government looks to sell up to 6.78 per cent stake in the reinsurer through the offer for sale (OFS) route at a discount of 6 per cent to Tuesday's closing price.   

The government would divest 3.39 per cent equity in the Mumbai-headquartered public sector reinsurance company in the base case and will consider selling an additional 3.39 per cent stake, as the green shoe option. The floor price of the offer is set at Rs 395 apiece, a 6.23 per cent discount to Tuesday's closing price. 

The President of India, acting through and represented by the Ministry of Finance, informed stock exchanges about an announcement with respect to OFS of up to 5,95,12,000 equity shares of face value of Rs 5 each of the company. 

Only non-retail investors can bid today. Retail investors, employees and non-retail investors, who choose to carry forward their un-allotted bids from T day, can bid on Thursday.

In an event of oversubscription, the government can additionally sell 5,95,12,000 (3.39 per cent) equity shares of the company. In that case, the base offer size and the oversubscription option will represent 11,90,24,000 (6.784 per cent) equity shares of the company, collectively. 

"Additionally, 50,000 Equity Shares (equivalent to 0.04 % of the Offer Shares) may be offered to eligible employees of the Company, in accordance with the terms and conditions provided in the OFS Guidelines, subject to approval from the competent authority (the "Employee Offer"). The eligible employees may apply for Equity Shares amounting up to Rs. 500,000," GIC Re said.

The offer will take place during trading hours on a separate window of the stock exchanges commencing at 9:15 am and will close at 3:30 pm IST.