LIC IPO: The government has invited proposals for hiring investment bankers, legal advisors, registrars, share transfer agents (RTAs) and advertising agencies for the issue of LIC. LIC’s issue will be the largest compared to any previous IPO.
According to the Department of Investment and Public Asset Management (DIPAM), the proposal request (REP) can be made on the CPPP site eprocure.gov.in/eprocure/app. can be downloaded from. The last date for submission of bids for the proposal is August 5. Which company has been selected will be revealed on 6 August.
According to the official circular, “no one can place more than one bid”. The cabinet had approved the issue of LIC this week.
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At present, the valuation work of LIC is going on. Once this is completed, the Book Running Lead Managers (BRLMs) will assist DIPAM in handling the LIC issue.
Book Running Lead Managers will need to have advised, handled and completed transactions in an IPO of at least Rs 5000 crore or more between April 1, 2016 and March 31, 2021, in order to submit proposals. OR The capital market transaction during this period should be Rs 15,000 crore or more.
The government expects that the issue of LIC may come by the end of this fiscal year. 10% of LIC’s IPO will be reserved for policy holders.
The government has already amended the LIC Act so that the issue of the company can be issued easily.
Deloitte and SBI Cap have been selected as pre-IPO transaction advisors of LIC. The listing of LIC is crucial to meet the company’s disinvestment plan target.
The company is set to raise Rs 1.75 lakh crore this fiscal by selling its minority stake and privatization of banks.
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Out of this Rs 1.75 lakh crore, Rs 1 lakh crore will come from privatization of banks and financial institutions. The remaining Rs 75,000 crore will come from CPSE disinvestment.
In the current fiscal year, the company has raised Rs 3,994 crore by selling SUUTI’s stake in Axis Bank. Apart from this, Rs 3700 crore has been received from selling stake in NMDC.
In the budget this year, Finance Minister Nirmala Sitharaman had said that LIC’s IPO may be issued in the fiscal year 2021-2022.
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