New Delhi.Sept 26:
The government has shortlisted Cyril Amarchand Mangaldas for giving legal advice on upcoming mega IPO of India's largest insurance company Life Insurance Corporation (LIC), an official said.
Four law firms — Crawford Bayley, Cyril Amarchand Mangaldas, Link Legal and Shardul Amarchand Mangaldas & Co — had made presentations before the Department of Investment and Public Asset Management (DIPAM) on September 24.
Following presentations, Cyril Amarchand Mangaldas has been selected as legal advisor for the initial public offering (IPO) of Life Insurance Corporation (LIC), the official told PTI.
DIPAM had first floated RFP on July 15 inviting bids from legal advisors for the mega IPO and the last date for bidding was August 6. However, the RFP did not receive sufficient response. Following that, on September 2, it issued a fresh RFP and set September 16 as last date for bidding.
Those put in bids made presentation before DIPAM on September 24.
The government aims to come out with the IPO and subsequent listing of LIC on the bourses in the January-March quarter of 2022. The government is also mulling allowing foreign investors to pick up stakes in country's largest insurer LIC.
Chief Economic Adviser Krishnamurthy Subramanian on Saturday expressed confidence that the listing of LIC would happen by the fourth quarter of this year.
''…this year's budget has Rs 1.75 lakh crores as the proceeds from privatisation. Air India is proceeding well. You must have read that there are two bids that have come. Bharat Petroleum and LIC's listing is also, we are confident it should happen by the fourth quarter of this year,'' he said.
''I am quite confident that this year, history will look at as a very, very important year for privatisation,'' he said at an interactive session as part of 'PGPMAX Leadership Summit 2021' of Indian School of Business (ISB) in Hyderabad.
The government has recently appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial public offering of country's largest insurer LIC.
Subramanian, who was replying to a query on privatisation, talked about the 'Atma Nirbhar Bharat' policy and the key reform of promoting privatisation vis-a-vis public sector entities except for some strategic sectors.
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 Cabinet Committee on Economic Affairs had in July 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 9,110 crore has been mopped up through minority stake sales in PSU and sale of SUUTI stake in Axis Bank.