To begin appointed as transaction advisor for the Initial Public Offering (IPO) of the country’s largest insurer – Life Insurance Corporation Of India–several dozens of global brokerage houses and financial institutions are in a big race. As per the government official advice, several Top banks, brokerages, and consulting firms that including CLSA, Credit Suisse Securities, Citigroup global market, Deloitte India, IDFC Securities, Axis Capital, IIFL Securities, Edelweiss Financial Services, JM Financial, SBI Capital Market &YES securities also have applied for the position of the Pre- IPO advisor. It is expected that the government will engage 2 pre-IPO transaction advisors for the LIC’s public offer which is expected as the country’s largest ever. The advisor services for IPO or strategic disinvestment or strategic sales and also handled IPO’s for more than Rs 5000 crores during the previous three years.
As per the preparation of the proposed IPO, The Department of Public Asset Management (DIPAM) has invited bids from investment bankers, financial institutions, and consulting firms for the advice. It was July 24 the last date for submitting bids and which was already extended from July 13. The advisor will asset and advise the government on modalities of IPO, organizing non-deal roadshows, the timing structuring the transaction, and also they will suggest measures to fetch the maximum value and positioning of the minority sale among the other aspects by ensuring preparatory aspect of the proposed IPO.
In the 2020-2021 budget Finance Minister Smt.Nirmala Sitharaman has announced that the government would sell a part of its holding in LIC.LIC is fully owned by the Government.
In the January-March of the current fiscal year, the government is looking at listing LIC on domestic courses, and also in this fiscal year the government budgeted a disinvestment target of Rs:2.10lakh crore and IPO will contribute a significant portion on it.
It was at the time when the government plans to divest stake in Air India, Concor and BPCL have been put on the back burner due to COVID-19, the public listed companies have come. And also in this fiscal year, it has been push backed twice the bid invitation deadlines for Air India and BPCL.
It was also mandatory that the bidders should have handled or completed between 1st April 2017 to 31st March 2020, at least one transaction of IPO of a size of Rs 5000 crore or more capital market transaction during this period.