The Indian government is set to initiate an offer for sale (OFS) of its stake in General Insurance Corporation of India (GIC Re) on Thursday, sources have told CNBC-TV18.

The planned dilution will see the government reduce its holding by just under 7%, marking the first such stake reduction since GIC Re’s initial public offering (IPO).

Currently, the government holds an 85.78% stake in GIC Re. This move follows a precedent set during LIC’s IPO, where the government sold a 3.5% stake and planned to offload an additional 1.5% to facilitate the insurer’s inclusion in index funds.

A Reuters report in April had suggested that the government was “open to a minority stake sale” in GIC and Life Insurance Corporation of India in financial year 2024/25 after assessing investor appetite.

The government was planning to sell its 10% stake in GIC over a period of time. Notably, GIC’s shares have gained 2.5% over the past six months, closing at ₹1,062.30 on Tuesday.

The government’s divestment in GIC Re would represent a significant step in its broader strategy of gradually reducing stakes in state-owned enterprises while managing market conditions and investor interest.