The government proposes to sell a 6.78% interest in General Insurance Corporation (Re) of India through an offer for sale (OFS), with a floor price of Rs 395 per share. The offer for sale (OFS) for more than 11.90 crore shares in the state-owned reinsurance company will begin on Wednesday, September 4, for institutional investors. Retail investors will be able to bid in the share sale offer on Thursday.
The central government will dispose 3.39 percent of its equity, with an extra 3.39 percent available as a green shoe option in GIC Re. At the floor price of ₹395 per share, the share sale would generate aon the share sale offer on Thursday.
How you, as a retail investor can bid for the GIC Re OFS?
The corporation uses the bidding process to determine price when it comes to an OFS. You can place bids at the floor price or at a predetermined price as a retail investor. The floor price for the OFS has been set by the government at ₹395.
The demand from investors, who have entered at different price points, is then analyzed and the cut-off price is determined.
Stock Performance Of GIC
The stock price of GIC Re was immediately impacted by the announcement of the stake sale. The shares had a decline of about 5%, resulting in a day low of Rs. 399.15, the lowest since August 19. Compared to the market as a whole, this decrease was more severe because the benchmark Nifty 50 index fell by just 0.67% on the same day. In spite of this setback, GIC Re’s stock has performed well in the long run, rising by 30.5% so far this year and by 78% over the previous year.
What is an Offer for Sale (OFS)?
Companies, especially those that are publicly traded, can raise money by selling shares through an OFS. The government and other significant shareholders are particularly fond of selling their shares in public sector companies. Both institutional and ordinary investors are able to participate in the transparent process.
