GIC Re OFS: Should You Buy This 5% Stake?

The Indian government is selling up to 5% of its stake in General Insurance Corporation of India through an Offer for Sale. Retail investors can bid from June 17. Here is what this means for your money.

Here's what happened: The Government of India is divesting up to 5% of its shareholding in General Insurance Corporation of India (GIC Re) via an Offer for Sale (OFS).. The OFS opens for non-retail investors on June 16 and for retail investors on June 17, giving individual investors a chance to buy shares at a likely discounted price.. GIC Re is India's largest reinsurance company — it backs the insurance policies sold by general insurers, acting as a safety net for the entire insurance industry..

What you should do: Check if you have a Demat and trading account active — you need both to apply for any OFS on the stock exchanges.. Compare the OFS floor price (announced by the government before the issue opens) against GIC Re's current market price to judge if the discount is attractive.. Apply through your broker's OFS window on June 17 — bids placed early in the day have a better chance of allotment at the cut-off price..

In most government OFS issues, retail investors get shares at a 5% discount to the cut-off price — always check the official discount before bidding, as it directly improves your effective buying cost.