Govt floats Request for Proposal to appoint intermediaries for mega LIC IPO

The government has floated tenders to appoint book running lead managers, legal advisers, registrar and advertising agency for the initial public offering (IPO) of Life Insurance Corporation of India (LIC), touted to be India’s largest. 

The listing of LIC’s shares on exchanges would involve part-sale of government’s stake in the insurer, and to raise fresh equity share capital, the Department of Investment and Public Asset Management (DIPAM) said in the Request for Proposal (RFP) inviting bids from intermediaries. 

A part of the public offering may be reserved for employees and policyholders of LIC, it said. In the Budget, the government had announced 10 per cent of the IPO issue size of LIC would be reserved for policyholders. “The potential size of the IPO is expected to be far larger than any precedent in Indian markets,” it said. In order to achieve a successful IPO, it is the endeavour of the government to attract investment from institutional investors, both domestic and global, in addition to retail investors, it said. 

Merchant bankers, and registrar and share transfer agents will have to submit their bids by August 5. Merchant bankers will be required to structure the IPO as per the prevailing framework of Securities and Exchange Board of India (Sebi). They will also be required to undertake due diligence activities and prepare the draft red herring prospectus (DRHP). 

Legal advisers and advertising agency are required to submit their bids by August 6. Legal advisers are required to submit a proposal in a consortium with an international law firm with similar experience and expertise in public offerings in capital markets.