The two-day issue, which opened on Wednesday for non-retail investors, was subscribed 1.08 times. The OFS of the state-owned reinsurer will be open only for retail investors on Thursday. The share sale will happen on the exchange platform during trading hours.
The floor price was set at ₹395 per share. GIC shares dropped 5.7% lower at ₹397.5 on Wednesday.
“Investors with a long-term appetite of 3-5 years or more could subscribe to this OFS,” said Aamar Deo Singh, senior vice president of research at Angel One. “GIC may have a slow-paced growth like LIC, but in the longer term, it could do well. We would also suggest accumulating the stock on any corrections.”
GIC is the sole reinsurer in the domestic reinsurance market and provides reinsurance to the direct general insurance companies in the Indian market across categories.The government is selling 6.78% of its stake in the company in the OFS. With the sale, its holding will come down to 79%.Some analysts suggest buying the stock only after it goes above ₹440 for technical reasons.”GIC RE has been trading in a range of ₹375-440 for the past two months, following a retest of its previous swing high,” said Ajit Mishra, senior vice president of research, Religare Broking. “The stock appears to be in a consolidation phase,”
Mishra said that traders must wait for a clear breakout for bullish bets with a stop loss of ₹375.
GIC shares have gone up 27% in 2024 so far, compared to the benchmark Nifty 500, which has gone up 22%.
“We will see good appetite and suggest retail investors to subscribe to the issue,” said Hemang Jani, director at Finazenn.
Jani said that shares of GIC can go up again after the issue closes.