As on December 31, 2020, the government held 85.78 per cent stake in GIC RE, and 85.44 per cent holding in the New India Assurance Company.
GIC RE and New India Assurance are trading below their respective issue price on the BSE
Shares of two listed state-owned insurance companies, New India Assurance Company (Rs 164.20) and General Insurance Corporation of India or GIC Re (Rs 170.90), were locked in the upper circuit of 20 per cent on the BSE on Thursday on report that the government is considering privatisation of United India Insurance and General Insurance Corporation.
As on December 31, 2020, the government held 85.78 per cent stake in GIC RE, and 85.44 per cent in the New India Assurance Company, the shareholding pattern data shows.
GIC Re is the largest reinsurer in the domestic reinsurance market in India and leads most of the domestic companies' treaty programmes and facultative placements. The New India Assurance Company, meanwhile, is the largest general insurance company in India.
On February 1, Union Finance Minister Nirmala Sitharaman had announced big-ticket privatisation agenda of the government in the Budget 2021-22 which included selling two state-run banks, one general insurance company, seven major ports and the mega Life Insurance Corporation of India (LIC) public issue. Of the Rs 1.75 trillion divestment target set for the next fiscal year beginning April 1, the government expects Rs 1 trillion to come from divestment of its stake in public sector banks and financial institutions.
According to a Economic Times report, the finance ministry, and government's think-tank Niti Aayog will jointly finalise the general insurer that will be considered for privatization.
“Privatisation of GIC Re will only happen if the government decides to exit the reinsurance business and that assessment will be done in consultation with Niti Aayog,” the financial daily quoted the official as saying.
GIC RE and New India Assurance are trading below their respective issue price on the BSE by 63 per cent and 58 per cent, respectively. These companies had made stock market debut in October-November 2017.
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