Good response to road shows, ahead of likely GIC Re OFS
financialexpress.comThe government kick-started the process for additional stake sale in General Insurance Corporation (GIC Re), with roadshows in key global financial hubs including New York, Singapore, Hong Kong, Dubai and London.
According to an official source, the outreach elicited “quite positive response” from global investors, in what would give a fillip to the offer for sale (OFS).
Currently, the government owns 85.78% of GIC Re and needs to reduce its stake by 10.78 percentage points to 75% by August to meet the minimum public shareholding (MPS) of 25% in the company. The current market value of the government’s 10.78% stake was worth Rs 7,341 crore. If the norms are unmet by August, the government will have to extend the time for another year.
So, the OFS could come any time after the roadshows which began on February 19 and was scheduled to end on March 1. Last week, investor outreach was completed in Singapore, Hong Kong and Dubai. This week, roadshows are underway in New York and London.
The roadshows led by the Department of Investment and Public Asset Management (DIPAM) have representation from the Department of Financial Service and GIC Re.
If the GIC OFS hits in March, it would boost the government’s disinvestment revenues and help it achieve the unofficial target of mobilising Rs 18,000-20,000 crore via disinvestments in FY24. So far in the current financial year, the government has received Rs 12,609 crore through minority stake sales in firms.
The roadshows showcase GIC Re’s dominant domestic market share of 67% share gross reinsurance premium of USD 4.4 billion (FY23). The rest of the shares are with foreign reinsurance branches (FRBs).
India’s general insurance market is estimated to grow at a compound annual growth
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