The Cabinet Committee on Economic Issues sanctioned the initial public offering proposal of Life Insurance Cooperation, in July 2021.
The primary request for proposal (RFP) was proposed on July 15 with August 6 as the deadline. It did not work out well. Then, the department of investment and public asset management (DIPAM) put forward a new RFP to settle on a legal advisor for the IPO of the insurance colossal.
On September 2, a new RFP was published keeping September 16 as the last date to draw the conceivable dealers. DIPAM softened particular norms regarding the payment of fees. Before, the chosen dealer could get the advisory fee only after the successful implementation of the transaction. The new norms allow the advocate to obtain 1/2 of its fees after filing the Draft Red Herring Prospectus; he can avail the balance after the listing of LIC.
Four law firms- Crawford Bayley, Link Legal, Shardul Amarchandh Mangaldas, and Cyril Amarchandh Mangaldas were contesting to become the legal adviser for the mega listing of LIC in the March quarter.
The four companies gave presentations before DIPAM on September 24, Friday.
Then the PTI informed that Cyril Amarchandh Mangaldas will become as the legal advisor of the IPO of LIC.
Ten merchant traps were already selected to manage the IPO. The selected names include Goldman Sachs Group Inc, JPMorgan Chase & Co, ICICI Securities Ltd, Kotak Mahindra Capital Co, JM Financial Ltd, Citigroup Inc, and Nomura Holdings Inc.
The government is considering the permit of foreign portfolio investors (FPI) in LIC. They are going to align the IPO with Sebi norms to make FPI possible in LIC.
So far, IPO is looked forward to because it is the largest of its kind in the Indian market. Worries like employment degeneration due to privatization and killing of activities of the common man in the stock market persists.
There is a hope that the current financial year will witness the completion of the mega IPO of LIC. A sum of Rs.80,000 to 10,000 crores can be achieved by the govt., even by selling a tenth of the stake. This decision is imperative in achieving the disinvestment target for FY22.