LIC IPO: 10 merchant bankers appointed to manage the insurer’s mega initial public offering
The government has appointed 10 merchant bankers, including Goldman Sachs (India) Securities, Citigroup Global Markets India and Nomura Financial Advisory & Securities India, to manage the mega initial public offering of the country’s largest insurance company LIC. Other selected bankers include SBI Capital Markets, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities and Kotak Mahindra Capital Co Ltd, according to a circular on the disinvestment department’s website.
DIPAM Secretary Tuhin Kanta Pandey tweeted, “Govt has finalized the Book Running Lead Managers & few other consultants for LIC’s IPO.”
On July 15, the Department of Disinvestment had invited applications for the appointment of merchant bankers. Subsequently, 16 merchant bankers made presentations on the listing and management of the partial disinvestment of Life Insurance Corporation (LIC).
The Department of Investment and Public Asset Management (DIPAM) is also in the process of appointing a legal advisor for the stake sale and the last date for bidding is September 16.
Actuarial firm Milliman Advisors LLP India has already been appointed to assess the embedded value of LIC ahead of the IPO, which is likely to take place in the January-March quarter of 2022.
The government is also considering allowing foreign investors to take stake in the country’s largest insurance company LIC. As per SEBI (Securities and Exchange Board of India) 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 last month 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.
LIC’s listing will be crucial for the government to meet its 2021-22 (April-March) disinvestment target of Rs 1.75 lakh crore. So far this financial year, Rs 8,368 crore has been raised through sale of minority stake in PSUs and SUUTI (Specified Undertaking of Unit Trust of India) stake in Axis Bank.
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