Actuarial firm Milliman Advisors LLP India is working out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
The government has shortlisted 10 merchant bankers, including Goldman Sachs Group Inc., J P Morgan Chase & Co, and ICICI Securities, to manage the mega initial public offering (IPO) of the country’s largest life insurer LIC. As many as 16 domestic and international firms had made presentations before the Department of Investment and Public Asset Management (DIPAM) on August 26 to act as book running lead managers (BRLMs) for the IPO — touted to be the biggest share sale in the country’s history.
“Goldman Sachs Group Inc, JPMorgan Chase & Co, ICICI Securities Ltd, Kotak Mahindra Capital Co, JM Financial Ltd, Citigroup Inc and Nomura Holdings Inc are among the 10 BRLMs that have been shortlisted,” an official said. With the merchant bankers in place, once the embedded valuation of LIC is arrived at, the government will go ahead and file draft IPO papers with market regulator Sebi.
Actuarial firm Milliman Advisors LLP India is working out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors. The government aims to come out with the IPO and subsequent listing of Life Insurance Corporation (LIC) on the bourses in the January-March quarter of 2022.
The government is also mulling allowing foreign investors to pick up stakes in the country’s largest insurer LIC. As per Sebi rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.
The DIPAM on July 15 had invited applications for appointment of up to 10 merchant bankers for LIC IPO. The last date for bidding was August 5. The Cabinet Committee on Economic Affairs last month cleared the initial public offering proposal of Life Insurance Corp of India.
The ministerial panel known as the Alternative Mechanism on strategic disinvestment will now decide on the quantum of stake to be divested by the government. “The potential size of the IPO is expected to be far larger than any precedent in Indian markets,” the department had said.
The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March). So far this fiscal, Rs 8,368 crore has been mopped up through minority stake sales in PSU and sale of SUUTI stake in Axis Bank.