LIC IPO: Finance Ministry Invites Bids For Transaction Advisors

On Friday, the finance ministry laid the road to divestment in the country largest insurer, in what is expected to become the largest ever IPO (initial public offering) in India. The Department of public asset management (DIPAM), under the finance ministry, has invited bids from consulting firms, investment bankers and financial institutions to advise the government on the preparatory processes of LIC's IPO.

The 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," the government said in a request for proposal (RFP) issued on Friday.

The government has set some experience criteria for advisors including handling of transactions or IPO of more than Rs 5,000 crore during last three years or should have managed a capital market transaction of Rs 15,000 crore or more. Bidders must have three years of experience for providing advisory services for IPO or strategic disinvestment or strategic sale or M&A activities or private equity investment transactions.

The LIC IPO will help cover a major chunk of the government's current financial year's disinvestment target of Rs 2.10 lakh crore. The government's decision to divest stake held in Life Insurance Corporation of India (LIC) by was of public listing was announced by Finance Minister Nirmala Sitharaman at the Union Budget 2020 in February.