Government is all set for offering 10 per cent shares in the country’s largest non-life insurance company, New India Assurance through through an offer for sale to the public. It is also looking for a similar dilution in the General Insurance Corp. (GIC Re) but, the timing has been not decided yet.
Earlier, the government has divested nearly around 15 per cent stakes in both the New India Assurance and GIC in 2017. The disinvestment from GIC Re resulted in the mop-up of Rs 11,370 crore and New India’s IPO of Rs 11,370 crore. Currently, both the companies are trading at big discounts to their issue price. 
Both the companies have one reason for not going public because the shares are considered to be undervalued trading at 20 per cent discount to its book value and the legacy is not reflected in the book value. The another reason for trading at discount is that the companies have relatively less liquidity and the large part of shares are held by public sector institutions.
An offer for sale of the company’s share would have advantages in improving the liquidity and in helping the government to raise revenues. The share prices of New India Assurance values the company at Rs 17,000 crore and market captialisation of GIC Re is at Rs 21,333 crore. A dilution of about 10 per cent would give the government close to raise Rs 4,000 crore.