The listing of LIC will be crucial for the government to meet its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March).
The government has shortlisted Cyril Amarchand Mangaldas to give legal advice on the upcoming mega IPO of India’s largest insurance company LIC, an official said.
Four law firms – Crawford Bailey, Cyril Amarchand Mangaldas, Link Legal and Shardul Amarchand Mangaldas & Co had made presentations before the Department of Investment and Public Asset Management (DIPAM) on September 24.
Following the presentations, Cyril Amarchand Mangaldas has been selected as the legal advisor for the Initial Public Offering (IPO) of Life Insurance Corporation (LIC), the official said.
DIPAM had first issued the RFP for this mega IPO on July 15 inviting bids from legal advisors and the last date for bidding was August 6.
However, the RFP did not elicit an adequate response. After that, on 2 September, it issued a new RFP and set 16 September as the last date for bidding.
The bidders made a presentation before DIPAM on 24 September. Ten merchant bankers have already been selected to manage the IPO, which is believed to be the largest in the country’s history. The names selected include Goldman Sachs Group Inc., JP Morgan Chase & Company, ICICI Securities Ltd., Kotak Mahindra Capital Co., JM Financial Ltd., Citigroup Inc. and Nomura Holdings Inc.
The government aims to IPO in the January-March quarter of 2022 and then list Life Insurance Corporation on the stock exchanges.
The government is also considering allowing foreign investors to take stake in the country’s largest insurance company LIC.
As per SEBI regulations, Foreign Portfolio Investors (FPIs) are allowed to buy shares in a public offering.
However, since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI norms with regard to foreign investor participation.
The Cabinet Committee on Economic Affairs had in July approved the initial public issue proposal of Life Insurance Corporation of India.
The ministerial panel, known as the Alternative Mechanism on Strategic Disinvestment, will now decide on the quantum of stake to be disinvested by the government.
“The potential size of the IPO is expected to be much larger than any precedent in the Indian markets,” the department had said.
The listing of LIC will be crucial for the government to meet its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March). So far this financial year, ₹9,110 crore has been raised through sale of minority stake in PSUs and SUUTI stake sale in Axis Bank.
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