UBS, which is handling the deal alongside Bankia Bolsa, said that a total of 369.61 million shares would be offered in the placing.
Bankia currently holds 461.69 million shares in Mapfre, or a 14.99 percent of the firm.
Shares in Mapfre closed at 2.753 euros on Wednesday, which would make the stake placed by UBS worth around 1 billion euros ($1.35 billion).
Bankia declined to comment on the operation, which is part of the lender’s restructuring plan agreed with Europe.
The plan aims to put the bank back on a sustainable path after it was rescued with 18 billion euros of European money last year following years of bad investments in real estate assets.
Earlier this year, the lender already sold its 12.1 stake in the International Airlines Group (ICAG.L) for 675 million euros and its 20 percent stake Spanish information technology firm Indra (IDR.MC) for 337 million euros.
($1 = 0.7403 euros)
Reporting by Julien Toyer and Jesus Aguado. Editing by Jane Merriman