General Insurance Corporation of India Ltd (GIC Re) saw its shares tumbling 6 per cent in Tuesday's trade, as the government's offer for sale (OFS) for the state-owned reinsurer kicked off for non-retail investors. The stock fell 6.42 per cent to Rs 363.40 apiece on BSE. The floor price of the issue was fixed at Rs 352, a 9 per cent discount, and brokerages such as SBI Securities, expected negative initial stock reaction.
By 11.39 am, non-retail bids were received for 71,41,612 shares, which accounted for 22.67 per cent of the non-retail quota size of 3,15,79,200 shares at an indicative price of Rs 352.14 apiece. A total of 10 per cent of the OFS shares are reserved for allocation to retail investors, who will be allowed to bid on Wednesday. 
 
In the case of non-retail bids, a minimum of 25 per cent of the offer shares are reserved for mutual funds and insurance companies, subject to receipt of valid bids at or above the floor price. While placing their bids, non-retail investors may indicate their willingness to carry forward their un-allotted bids to T+1 day for allocation to them in the unsubscribed portion of retail investors. 

The government's OFS move to sell stake in GIC RE was aimed at meeting minimum public shareholding (MPS) norms. The government held 1,44,55,67,615 shares or 82.40 per cent stake in GIC RE at the end of March quarter. Listed companies are required to meet 25 per cent MPS norms.  

Overall, the government is looking to raise Rs 3,087.74 crore from GIC RE. The base size of the issue comprised of 2 per cent equity or up to 35,088,000 shares of the company of face value of 5 each. In the case of oversubscription, GIC RE wishes to sell an additional up to 52,632,000 shares, representing a further 3 per cent of the total paid up equity share capital of the company. 

GIC RE has offered up to 20,000 shares to the eligible employees, in accordance with the terms and conditions provided in the OFS guidelines, or any other limit as may be approved by the competent authority. 

"Those non-Retail Investors who have placed their bids on T day and have chosen to carry forward their unallotted bids to T+1 day, shall be allowed to carry forward and also revise their bids on T+1 day as per the OFS Guidelines. For Retail Investors, Employees and for non-Retail Investors who choose to carry forward their un-allotted bids to T+1 Day," GIC RE said in an exchange filing.