The government has started the preparation of the IPO in LIC. The Department of Public Asset Management has invited bids from consulting firms, investment bankers and financial institutions to provide advisory service to the government on the preparatory processes of the proposed IPO. The government had planned to engage two pre-IPO transaction advisors as it expects LIC’s IPO to be the biggest one in the country so far. As per a request for proposal (RFP) issued on June 19, the last date for bidding by advisors is July 13. Bids are to be opened on July 14.
RFP stated that government, “proposes to engage up to two pre-IPO Transaction Advisor(s) from reputed professional consulting firms/ investment bankers/ merchant bankers/ financial institutions/ banks, independently (not in the consortium) for facilitating/assisting DIPAM in the preparatory processes leading to the IPO of LICI”.
It is mandatory for a participating Advisor to have handled ‘IPOs of more than Rs 5,000 crore during the last three years’ and have experience of minimum three years in ‘providing advisory services for IPO or strategic disinvestment or strategic sale or M&A activities or private equity investment transactions’.
RFP further stated, “Bidders should have advised, handled, and completed at least one transaction of IPO of a size of Rs 5,000 crore or more between April 1, 2017, to March 31, 2020, or should have managed a capital market transaction of Rs 15,000 crore or more during the period”.
Selected advisors will hold the responsibility of handling the preparatory aspects of the IPO and will provide advice and assistance to the government on the modalities of it.
The government has been suffering the delay in its divestment plans in Air India, BPCL and Concur. It is planning to list LIC on domestic stock markets in the January-March quarter of the current fiscal year.
Finance Minister Nirmala Sitharaman said, “Listing of companies on stock exchanges disciplines the company and provides access to financial markets and unlocks its value. It also gives an opportunity for retail investors to participate in the wealth so created”.