After evaluating bids from almost a dozen of players,the government has finalised Edelweiss Financial Services Ltd and Deloitte as the two pre-initial public offer (IPO) transaction advisors for the mega IPO of the life insurance behemoth Life Insurance Corporation of India (LIC),
Some of the other entities who had bid for the LIC assignment include Axis Capital, Citigroup Global Markets, CLSA, Credit Suisse Securities, IDFC Securities, IIFL Securities, JM Financial, SBI Capital Markets and YES Securities.
On June 19, the central government had kickstarted the process of partial divestment of stake in LIC with the finance ministry inviting bids from consulting firms, investment bankers, and financial institutions for advising it on the proposed initial public offer (IPO), that will be largest in the country..
The adviser would ensure preparatory aspects of the proposed IPO and would, advise and assist the government on modalities of IPO and the timing; structuring the transaction; organising non-deal roadshows, suggesting measures to fetch optimum value; positioning of the minority sale,among others, the RFP said.
"Bidders should have advised, handled, and completed at least one transaction of IPO of a size of Rs 5,000 crore or more between April 1 2017 to March 31, 2020 or should have managed a capital market transaction of Rs 15,000 crore or more during the period," the RFP said.
The IPO of LIC would contribute a huge chunk to the government's budgeted disinvestment kitty of Rs 2.10 lakh crore this fiscal.For the 2020-21 fiscal, the government has set a disinvestment target of Rs 2.10 lakh crore. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sale in financial institutions including LIC and IDBI.
Though,so far this fiscal,the government has not been able to sell stake in any central public sector enterprises (CPSE) as coronavirus outbreak has impacted equity markets,Finance Minister Nirmala Sitharaman on Monday had said the government wanted to sell stake in public sector companies at a time when it fetches the right price.
“There are already nearly 22-23 such PSUs which have been cleared by the Cabinet for disinvestment. The intent is clear that at least for those which had already been cleared by the Cabinet, we will have to disinvest,” Sitharaman said.