Government is selling up to 5% of its stake in GIC
There was a huge fall in the shares of government reinsurance company General Insurance Corporation of India (GIC) today. The reason for this is the decision of the Central Government, under which 5 percent of its stake in the company is being sold at a cheap price. Under this Offer for Sale (OFS), shares are being available at the base price of Rs 352, which is much lower than the current market price. This is the reason that as soon as the market opened on Tuesday, investors started selling heavily and the stock fell by more than 5 percent.
Government is selling stake cheaply
According to the information given by the DIPAM Secretary, the Central Government is reducing its stake in GIC. For this, the floor price of the offer for sale has been fixed at Rs 352 per share. This simply means that the shares are being offered to investors at a huge discount compared to the market price. The base size of this issue has been kept at 2 percent. Apart from this, if the demand from investors is good, then an option to sell additional 3 percent stake (Green Shoe Option) has also been kept. In this way, the sale of total 5 percent stake is expected to bring at least Rs 3088 crore to the government treasury as per the minimum price.
Huge pressure seen in shares
Since the government is offering shares to investors at a lower price than the market, there has been a huge decline in the demand for GIC shares in the listed market. The share price fell 5.72 percent to Rs 366.15 in the open market on BSE. During intra-day trading, it slipped 5.78 percent to Rs 365.90. The selling pressure in the shares was so strong that even sporadic purchases at lower levels could not handle it. Whenever a promoter starts selling shares at a price below the market price, it is a normal market process to bring immediate pressure on the share prices in the open market. On Tuesday, June 16, this issue has been opened for large investors i.e. non-retail category.
When will retail investors get a chance?
Retail investors will be able to bid in this offer for sale on Wednesday, June 17. Talking about the shareholding pattern, by the end of March 2026 quarter, the Government of India had a huge stake of 82.4 percent in GIC. At the same time, general retail investors held only 1.4 percent and non-retail investors held 0.14 percent. After this sale, there will be a slight reduction in the total stake of the government in the company.
How was the stock’s condition in one year?
In the last one year, this government share has shown a lot of ups and downs to the investors. On March 9, 2026, the share was priced at Rs 351, which was considered a one-year record high at that time. However, just one month later, the stock gained tremendous momentum. On April 16, 2026, there was a strong jump of 19.09 percent and it reached a new peak of Rs 418. If we look at the corporate history of this company, it has also given bonus to its shareholders once. With the ex-date of July 12, 2018, the company had distributed bonus shares to its investors in the ratio of 1:1, that is, one share was given free for every share.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
