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( As on 08/08/2017 00:45) GIC files papers for IPO, govt to dilute 14.22% stake

General Insurance Company of India has filed draft red herring prospectus (DRHP) for initial public offer for sale of 12.4 crore shares as part of the government's strategy to list all state-owned insurers, reported PTI.

Following the IPO, the central government's stake in the wholly owned reinsurance firm will come down by 14.22 per cent, according to the DRHP.

The company proposed IPO is of 12.4 crore shares with a face value Rs 5 each. Of this, 1.7 crore will be fresh shares while 10.7 crore will be offered for sale by the government.

The company intends to utilise net proceeds from the fresh issue of shares to augment capital base, support future growth and maintain current solvency levels.

GIC Re provides reinsurance support to 54 direct general and life insurance companies, both public and private, in the Indian insurance market.

It also has a global presence providing reinsurance services to insurance companies in the SAARC region, African countries and the Middle-East, besides having branch offices in London, Dubai and Malaysia and a representative office in Moscow.

In mid-January, the Cabinet had approved listing of general insurance companies - New India Assurance Company, United India Insurance, Oriental Insurance Company, National Insurance Company and General Insurance Corporation of India (GIC Re). It had approved dilution of up to 25 per cent stake in each of the five companies.

The government has set a steep disinvestment target of Rs 72,500 crore for the next fiscal, of which Rs 11,000 crore is expected to come from listing of PSU general insurers.

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