GIC shares dip 4% as Rs 3,088 crore OFS opens for retail investors. Should you participate?

Shares of General Insurance Corporation of India (GIC) declined 4% to Rs 346 on the BSE on Wednesday as the government's offer for sale (OFS) to divest up to 5% stake in the state-run insurer opens for retail investors today at a floor price of Rs 352 apiece, implying a 2% discount to the stock’s previous closing price.

In an exchange filing released on Monday, GIC announced that the government aims to sell up to 3.51 crore shares, representing a 2% equity stake, as part of the base offer, which opened for non-retail investors on Tuesday (June 16). The government can also exercise the oversubscription option to additionally sell another 5.26 crore shares, representing another 3% stake in the company for the OFS that opens for retail investors and employees on Wednesday (June 17).

This collectively brings the total offer size to 8.77 crore shares, or a 5% equity stake in the general insurance company. At the floor price of Rs 352 per share, this would be worth more than Rs 3,087.74 crore.


Also Read | GIC shares decline 7% as Rs 3,088 crore OFS opens for non-retail investors at 9% discount

The offer for sale witnessed strong investor demand on the first day, with the issue being oversubscribed 3.72 times, reflecting robust participation from institutional investors. The government will exercise the full green shoe option.

Should you participate in GIC OFS?

Market analysts however advised retail investors to avoid government’s OFS in GIC, citing concerns over profitability and sector headwinds. "We advise retail investors to avoid subscribing to the issue as, fundamentally, the company is still struggling to deliver operational profit, with a FY26 combined ratio of 106%, and is relying heavily on its investment portfolio (around Rs 1.5 lakh crore as of FY26) for profits," said Sunny Agrawal, head - fundamental research, SBI Securities.

Agrawal further explained that while the combined ratio has improved from 109% in FY23 to 106% in FY26, with likely further improvement in FY27, the reinsurance industry continues to face pricing pressure and rising competition. On the valuation front, the business is available at FY26E Price to book value of 1.2x (excluding fair value changes) with RoE of 16.4%.

The latest stake sale comes as the government recently ramped up its disinvestment efforts. Recently, the government offloaded some of its stake in Coal India, NHPC, NLC India and other PSU companies.

The government planned to sell 10% of its stake in the insurer ‌in tranches to meet the market regulator's minimum public shareholding norm, Reuters reported in 2024. ⁠Of this, the government already sold a 3.4% shareholding in September 2024.

Also Read | Retail players can skip GIC Re's OFS, say analysts

GIC shareholding pattern

The President of India owned more than 82% stake in GIC as of March 31, 2026, according to data on the company’s shareholding pattern on NSE. Life Insurance Corporation of India (LIC) meanwhile held around 10% stake, while 22 mutual funds held around 1.5% stake.

Around 2.07 lakh retail investors collectively owned a 1.4% stake in the company.

GIC share price

GIC shares tumbled over 7% on Tuesday after the OFS opened. The stock has overall fallen more than 6% in one week and 8% in one month. The shares of the company are down nearly 6% in 2026 so far.

In the longer term, the stock fell 6% in one year but gained 88% in three years and 75% in five years. The company has a market capitalisation of nearly Rs 62,527 crore.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)