Investment and Public Asset Management (Dipam) will select investment bankers for the Life Insurance Corporation (LIC) mega-Initial Public Offering (IPO) this week, with 16 accounting lead managers giving presentations to a high-level committee on Tuesday and Wednesday.
On Tuesday the international investment banks BNP Paribas, Citigroup Global Markets India Pvt. Ltd, BofA Securities (formerly known as DSP Merrill Lynch Ltd), Goldman Sachs (India) Securities Pvt. Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, JP Morgan India Pvt. Ltd and Nomura Financial Advisory and Securities (India) Pvt. Ltd will make their virtual presentations.
Domestic investment bankers such as Axis Capital Ltd, DAM Capital Advisors Ltd, HDFC Bank Ltd, ICICI Securities Ltd, IIFL Securities Ltd, JM Financial Ltd, Kotak Mahindra Capital Company Ltd, SBI Capital Market Ltd and Yes Securities India Ltd will be giving presentations on Wednesday.
Last month, the Union’s cabinet approved the IPO of LIC, India’s largest insurer, which is expected to go public in the March quarter of this fiscal year.
The government is betting on the sale of shares to reduce its budget deficit amid rising spending and a slump in revenue due to the pandemic. The government has put up a mammoth ₹1.75 trillion divestment target for this fiscal year.
On July 15, Dipam announced that it would appoint up to 10 investment bankers with the requisite IPO experience to form a team known as book-running lead managers. Interested bidders must have at least one IPO transaction with a size of at least. have handled ₹5,000 crore and have managed at least one equity market transaction or should have at least one sale offer or qualified institutional placement of at least. have managed ₹15,000 million euros.
“The shortlisted bidders would have to prove their qualifications in front of an inter-ministerial group (IMG) through a presentation covering the areas / criteria listed above. IMG would evaluate the bidders on the basis of the criteria mentioned based on their presentation and the proposals received and would shortlist them for the opening of its financial offers, ”said Dipam.
In consultation with Dipam, the investment bankers decide on the scope of the IPO, its structure and the timing. The bankers will also be responsible for conducting due diligence activities, preparing IPO documents and completing regulatory formalities with market and insurance regulators, exchanges and the Registrar of Companies. They are also expected to ensure the best return from the IPO to the government by running a pre-IPO survey and road shows to pique the interest of potential investors.
They will also subscribe for the IPO, allot shares, and provide after-sales support.
In her budget speech for FY21, Finance Minister Nirmala Sitharaman first unveiled the plan for LIC to go public. She said that listing on the stock exchange disciplines a company, provides access to financial markets and unlocks its value, and gives retail investors the opportunity to participate in the wealth it creates.
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