GIC Re hits 52-week high, zooms 62% in a month on privatisation buzz

Shares of General Insurance Corporation of India (GIC Re) hit a 52-week high of Rs 230.20 after rallied 10 per cent on the BSE in intra-day trade on Tuesday on the back of heavy volumes. The trading volumes on the counter jumped over four-fold with a combined 3.4 million equity shares having changing hands on the NSE and BSE till 10:58 am. In comparison, the S&P BSE Sensex was up 0.70 per cent at 50,748 points.

In the past one month, the stock of state-owned general insurance company has rallied 62 per cent on reports that the government is considering privatisation of United India Insurance and General Insurance Corporation. The benchmark index was down 2.5 per cent during the same period.

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.

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. GIC Re claims that it is exiting weak portfolios and moving towards underwriting profitability.

Meanwhile, the stock of the New India Assurance Company too rallied 11 per cent to Rs 180.85 on the BSE in intra-day trade today, up 33 per cent in the past one month. The trading volumes on the counter more-than-doubled with a combined 4.8 million equity shares having changing hands on the NSE and BSE so far. The New India Assurance Company, meanwhile, is the largest general insurance company in India.