NEW DELHI: The central government is planning to raise Rs 4,700 crore by offloading 6.78% stake in General Insurance Corporation of India (GIC) through Offer for Sale (OFS). The government will divest 3.39% equity with an additional 3.39% as green shoe option. The floor price is fixed at Rs 395 a piece against its last traded price of Rs 421.25.
The OFS opens on Wednesday for non-retail investors. Retail investors and employees of GIC can bid for the OFS on Thursday. Retail investors would be offered 10% of the total shares on offer while 0.4% of the shares would be offered to employees. The government currently holds 85.78% in the reinsurance company.
The GIC offer for sale is the first big attempt at divestment by the government in the current financial year. The government has budgeted for Rs 50,000 crore by way of divestment in public sector companies. Previous year, the government could receive only Rs 16,507 crore through sale of shares of PSU companies.
In the current financial year, the government is hoping to disinvest three PSUs --IDBI Bank, Shipping Corporation of India and Bharat Earth Movers Ltd. Expression of interests (EoIs) of these companies are already in the pipeline.