Centre Expands GIC Re OFS to 5% Stake Sale After Strong Investor Response; Activates 3% Greenshoe Option

The Government's stake sale in General Insurance Corporation of India (GIC Re) received strong demand from institutional investors on the opening day, prompting the centre to exercise the entire greenshoe option.

The Department of Investment and Public Asset Management (DIPAM) said the OFS was subscribed 3.72 times on day 1. Following the response, the government decided to increase the size of the offer and sell the full 5% stake planned under the transaction.

The OFS is part of the centre's FY27 disinvestment programme and is expected to help raise additional resources while increasing public shareholding in the state-owned reinsurer.

General Insurance Corporation of India shares ended Tuesday at ₹356.40, down 7.97%. The stock had opened at ₹371.20 and touched an intraday low of ₹356.05, according to exchange data.

Why Has The Government Exercised The Greenshoe Option?

The decision follows strong demand from non-retail investors on the first day of the OFS.

According to DIPAM, the issue was subscribed 3.72 times on 16 June. The government had initially offered to sell a 2% stake worth around ₹1,235 crore, with an option to offload an additional 3% through a greenshoe mechanism if investor demand remained strong.

With the greenshoe option now fully exercised, the total stake sale has increased to 5%. At the OFS floor price of ₹352 per share, the issue size rises to roughly ₹3,088 crore. The floor price was set at a discount of more than 9% to GIC Re's previous closing price of ₹387.25.

Retail investors and eligible employees will be able to submit bids on 17 June, the second day of the offer.

How Does The GIC Re OFS Fit Into The Government's Disinvestment Plan?

The transaction forms part of the centre's broader divestment and asset monetisation programme for FY27. The GIC Re sale follows a series of recent government stake sales that attracted sufficient demand for greenshoe options to be exercised.

Over the past month, the government launched OFSs in Coal India, NHPC, Central Bank of India and NLC India. All four issues saw strong participation from investors. Together, those transactions raised nearly ₹13,400 crore.

If the entire GIC Re OFS is completed, the amount mobilised through these recent stake sales will exceed ₹16,000 crore.

Including monetisation receipts, the government's collections currently stand at ₹21,732 crore, representing around 27% of the full-year target of ₹80,000 crore.

The GIC Re sale is one of several stake sales undertaken by the government in recent weeks as part of its FY27 disinvestment programme.

Also Read - Stock Market Update 17 June 2026: Indices Flat After Market Opening

Why Is Public Shareholding An Important Factor In The Stake Sale?

Government ownership in GIC Re stood at 82.4% as of March 2026, higher than the 75% minimum public shareholding norm applicable to listed companies. The OFS will bring down the centre's stake and increase the stock's public float.

GIC Re is the country's largest reinsurer. It provides reinsurance cover across segments such as property, health, agriculture and catastrophe risks.

The company works with insurers across India, helping them manage and distribute risk.

With institutional demand already exceeding the shares on offer and retail bidding scheduled for 17 June 2026, investors will now watch how the expanded stake sale is received by retail participants.

Sources:

Moneycontrol

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