LIC is Coming Up with ‘Largest Ever’ IPO

LIC’s Largest Ever IPO – The government has cleared the way for an IPO of the country’s largest insurer — Life Insurance Corporation of India. The Department of Public Asset Management (DIPAM) has invited bids from consulting firms, investment bankers and financial institutions to advise the government on the preparatory processes of the proposed LIC’s IPO.

LIC’s public offer is expected to be the country’s largest ever, for which the government will engage two pre-IPO transaction advisors. 

Government is bringing the IPO at a time when the government’s plans to divest stake in Air India, BPCL and Concor have been put on the back burner due to the coronavirus pandemic.

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The last date for bids for advisors to LIC’s IPO is July 13, as per a request for proposal (RFP) issued Friday. The bids will be opened on July 14.

“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,” the RFP said.

The proposed IPO will contribute a significant chunk to the government’s budgeted disinvestment target of Rs 2.10 lakh crore this fiscal year. Finance minister Nirmala Sitharaman had announced in the 2020-21 Budget that the government would sell a part of its holding in LIC by way of public listing. LIC is fully owned by the government.

“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,” she had said.

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