In an effort to see initial public offer (IPO) of Life Insurance Corporation of India (LIC) hitting the market in ongoing quarter, Finance Minister Nirmala Sitharaman on Friday reviewed the progress of the planned disinvestment of the country’s largest insurer.
“Union Finance Minister Smt. @nsitharaman reviewed progress of the LIC IPO in New Delhi today in presence of @SecyDIPAM; Secretary @DFS_India and Senior Officials @LICIndiaForever and @FinMinIndia via VC,” the Finance Ministry tweeted.
Finance Ministry did not give any details about the meeting, but it is believed that government is trying hard to complete the disinvestment process within the fiscal and such a review meeting was an effort to see what are the issues yet to be completed. It is expected that LIC will file draft red herring prospectus with (SEBI) soon.
This IPO is crucial for meeting the ₹ 1.75-lakh crore disinvestment target set for current fiscal (April-March). So far this fiscal, ₹9,330 crore has been mopped up through PSU disinvestment.
Read more: Review meeting with bank chiefs: FM Sitharaman expects credit demand to pick up soon
The government in September last year appointed 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd to manage the mega IPO of the country’s largest insurer LIC.
Other selected bankers include SBI Capital Market Ltd, JM Financial Ltd, Axis Capital Ltd, BofA Securities, J.P. Morgan India Pvt Ltd, ICICI Securities Ltd and Kotak Mahindra Capital Co Ltd. Cyril Amarchand Mangaldas has been appointed as legal advisor for the IPO.
The government is in the process of deciding the quantum of government stake that will be divested through the IPO. It is also mulling to allow foreign investors to pick up stakes in LIC. 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 last year cleared the disinvestment of LIC.