General Insurance Corporation Stock Tumbles 5% As Govt Proposes Divestment

The stock price of General Insurance Corporation (GIC) tumbled 5 per cent in the Wednesday trading session after the government proposed to off-load 6.8 per cent stake.

GIC stock traded at Rs 400 with 5.04 per cent loss in the morning session on the National Stock Exchange (NSE). 

The central government will divest 3.39 per cent equity with an additional 3.39 per cent as a green shoe option in GIC with a floor price of Rs 395 per equity share.

The offer for sale (OFS) in the state-owned reinsurance company opened on Wednesday for non-retail investors, posted the Secretary of the Department of Investment and Public Asset Management (DIPAM) on X.
 

Retail investors and employees of GIC would be able to bid on Thursday, it added.

OFS means the promoters (owners) selling their shares to raise additional funds for the company. While, in the financial markets parlance, the green shoe option is a provision that grants the seller the right to sell investors more shares than initially planned by the issuer if the demand proves higher than expected.

Currently the government of India (GoI) owns 85 per cent stake in the firm in the national insurer. The GIC stock delivered a 30 per cent return year-to-date (YTD) against the 27 per cent return in LIC stock.