Bombay Stock Exchange building. (Image: Wikimedia Commons)
The IPO (initial public offering) of General Insurance Corporation was subscribed 79.2% on the first day of bidding. The second-largest public offer got a huge response from the QIBs (qualified institutional buyers) as the portion reserved for them was oversubscribed on the first day itself. There is also clear contrast seen in the bid orders between Bombay Stock Exchange and National Stock Exchange as the subscription on NSE stood at 75% while it was just 4.2% on BSE. GIC is expected to raise Rs 11,372.64 crore at the upper end of the price band of Rs 912. The company has set a price range for the issue between Rs 855 to Rs 912 per equity share. GIC IPO is India’s second-largest public offer since Coal India’s Rs 15,200 crore and Reliance Power’s Rs 10,123.2 crore share sale — which was at the second spot before GIC IPO, now slipped to the third place.
The quota reserved for the QIBs was subscribed 1.56 times; the shares allocated for the NII (non-institutional investors) category got subscribed 0.42% while the quantum blocked for retail investors got subscribed 5.75%. The bids received for the shares reserved for employee category was subscribed 13.05%. The public offer will remain open for three days starting today to Friday (October 13). General Insurance Corporation is first of the five state-run non-life insurance firms to initiate a stake sale and listing process.
The company will not receive any proceeds from the offer for sale. However, the net proceeds from the fresh issue will be utilised towards augmenting the capital base of the organisation to support the growth of business and to maintain current solvency levels and for the general corporate purposes which are subject to applicable law. The fund requirements for the objects are based on internal management estimates and have not been appraised by any bank or financial institution. The company has posted an 11.7% increase in the consolidated net profit to Rs 3,004.21 crore as compared to last year’s Rs 2,689.58 crore.
Citigroup Global Markets India Private Limited, Axis Capital Limited, Deutsche Equities India Private Limited, HSBC Securities and Capital Markets (India) Private Limited, Kotak Mahindra Capital Company Limited are the book running lead managers of the issue.
