Shares of state-owned reinsurer General Insurance Corporation of India (GIC Re) declined sharply on Tuesday, falling over 6% after the government launched an offer for sale (OFS) to divest up to a 5% stake in the company at a discounted price.
The stock dropped 6.54% to an intraday low of ₹363.45 on the NSE. It opened 4.14% lower, ending its recent two-day winning streak as selling pressure intensified following the OFS announcement.
The government opened the OFS at a floor price of ₹352 per share, which represents a discount of about 9.10% compared to the previous closing price of ₹387.25.
The lower pricing led to immediate weakness in the stock as investors reacted to the supply overhang.
According to an exchange filing by GIC Re, the government plans to sell up to 3.51 crore shares, representing a 2% equity stake in the base offer for non-retail investors on June 16.
The divestment is part of a broader disinvestment strategy aimed at reducing the government’s stake in public sector enterprises.
DIPAM Secretary confirmed on social media platform X that the government will divest 2% equity initially, with an additional 3% available through a green shoe option, taking the total potential stake sale to 5%.
The OFS structure also includes flexibility for an additional oversubscription option of 5.26 crore shares, equivalent to another 3% stake in the company.
For retail investors and employees, the bidding window opens on June 17, following the initial non-retail tranche on June 16.
The government’s move is part of its ongoing effort to monetise holdings in state-run companies, improve market liquidity, and broaden public ownership.
However, in the short term, such discounted stake sales often lead to volatility in the stock price, as seen in GIC Re’s sharp decline following the announcement.
