The Central Government has started the process of disinvestment of Life Insurance Corporation of India (LIC), the largest insurance company in the country. The Finance Ministry has invited tenders from consulting firms, investment bankers and financial institutions to advise the government on the proposed initial public offering (IPA). For the initial process of this IPA, the government is considering appointing a pre-IPA transaction consultant with the help of the Department of Investment and Public Asset Management (DIPAM).
The Ministry of Finance has issued a Request for Proposal (RFP) in this regard. Interested companies can submit their tenders till July 13. These tenders will be opened on 14th July by Raji Deepam. It will provide advice and assistance on a variety of topics such as the nature of the transaction, the implementation of RAD Shaw to attract investors, and measures to maximize value.
The government plans to launch LIC in the domestic market in the January-March quarter of this financial year. In her budget speech for 2020-21, Finance Minister Nirmala Sitharaman announced the sale of the government’s share capital in LIC through IPA. The government has set a disinvestment target of Rs 2.10 lakh crore for this year. The government intends to raise good funds from LIC’s IPA. So far this financial year, there has been no sale of capital in public companies.
A consulting firm must have at least three years of experience in IPA, conceptual disinvestment, conceptual sale, private equity investment. The ministry said the consulting firms would verify the initial details of the proposed IPO and advise on the modus operandi and timing of the IPO. According to the RFP, those who have a bailee require an IPA of 5,000 KT or more between April 1, 2017 and March 31, 2020. During this period, it will be important for them to manage capital market transactions of Rs. 15,000 crore or more.