In Wednesday’s trading session, the shares of the largest reinsurer in the domestic reinsurance market in India moved down by 5.4 percent to a day’s low of Rs. 398.6 on BSE, after the Government of India offloaded a 6.78 percent stake in the company through an offer for sale (OFS).
With a market cap of Rs. 70,219.8 crores, at 11:16 a.m., the shares of General Insurance Corporation of India were trading in the red at Rs. 400.25, down by 5 percent, compared to its previous closing price of Rs. 421.25.
What’s the news:
According to the latest regulatory filings with the stock exchanges, today marks the first day of the government’s sale of its 6.78 percent stake in General Insurance Corporation of India through an OFS at a floor price of Rs. 395 per share.
The total size of the offer for sale (OFS) is projected to be Rs. 4,701 crores based on this floor price. The OFS is estimated to be worth Rs. 4,701 crores at the specified floor price.
The OFS opened on September 4 for non-retail investors, with up to 3.39 percent of the stake available. Retail investors and employees will be able to place their bids on September 5.
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Non-retail investors who place bids on September 4 and wish to carry forward any unallocated bids to the next day will be allowed to revise their bids.
The OFS involves 5.95 crore shares, with a green shoe option to issue an additional equal number of shares. Furthermore, 50,000 equity shares, equivalent to 0.04 percent of the offer shares, will be reserved and offered to eligible employees of the company.
The shares can be subscribed during trading hours on a separate window of the stock exchanges, starting from 9:15 am and closing at 3:30 pm on both days.
As of June 2024 shareholding pattern, the President of India held 150.5 crore equity shares in the General Insurance Corporation of India, constituting an 85.78 percent stake.
Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 15.4 percent from Rs. 11,166 crores in Q1FY24 to Rs. 12,886 crores in Q1FY25.
Similarly, its net profit increased during the same period from Rs. 978 crores to Rs. 1,401 crores, indicating a rise of nearly 43.3 percent YoY.
The company’s consolidated Gross Premium Income stood at Rs. 12,589.4 crores in Q1FY25 as compared to Rs. 9,206.8 crores in Q1FY24, representing a growth of 36.7 percent YoY.
Stock Performance
The shares of General Insurance Corporation of India have delivered positive returns of nearly 77 percent in one year and around 0.4 percent in the last six months. So far in 2024, the stock has given about 28.4 percent of positive returns.
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About the company:
General Insurance Corporation of India is the largest reinsurer in the domestic reinsurance market in India and leads most of the domestic companies’ treaty programmes and facultative placements.
Written by Shivani Singh
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