The Union Ministry of Finance will sell a 6.78 percent share in public-sector reinsurance company General Insurance Corporation of India (GIC) Re for around Rs 4,700 crore. For the first time since the reinsurance company's offer-for-sale (OFS) listing in 2017, non-retail investors will be able to purchase stakes on Wednesday.

"Retail investors and GIC employees may bid on Thursday. The government will divest 3.39 percent of its shares, with an additional 3.39 percent as a "green shoe option," according to a post on social networking platform X by the Secretary of the Department of Investment and Public Asset Management.

The OFS floor price is projected to be established at around Rs 395 per share, representing a 6% discount from the current market price (CMP). On Tuesday, GIC Re's share price closed at Rs 420.8, down 1.4%. The government presently owns 85.78 percent of GIC Re. This step is similar to a tactic utilized during LIC's initial public offering (IPO) when the government sold 3.5% of its stock and planned to sell an additional 1.5% to support the insurer's inclusion in index funds.

In April, GIC Re Chairman and Managing Director Ramaswamy Narayanan told that he expected the government to begin the process of divesting roughly a 10% interest in the reinsurer following the general elections, though no timetable has been set. "I believe the activities will begin following the elections. "It's a call for the government to take more than us in the stake sale," he said.

In an interview published on Monday, Narayanan stated that the insurance would need to reach the minimum public shareholding of 25%. "Currently, it is around 14%. So that is where the interest came from, and it is obvious that it will be an OFS by the government because we do not require funds. "Our solvency is very good," he remarked.

Beginning in fiscal year 2024, the government will no longer set a specific disinvestment target. The FY25 Union Budget has set a target of Rs 50,000 crore for various capital receipts, including disinvestment, up from the revised estimate of Rs 30,000 crore in FY24.