NEW DELHI: The government has issued a request for proposal (RFP), for selecting advisors to steer
partial disinvestment of its equity shareholding in state-run insurance company Life Insurance Corporation through an initial public offer (IPO), thus formally initiating the sell-off process.
The Department of Investment and Public Asset Management (Dipam) under the finance ministry, has issued a RFP, for pre-transaction advisors for the same.
As per DIPAM, the role be required to advise the government and LIC on optimal capital structure, face value and bonus ratio to prepare three year overallconsolidated financial statement, deciding on modality and timing of the IPO, to assist in compliance with Sebi and Irdai’s listing regulations and to advise government on the necessary amendments needed to the LIC Act.
The RFP seeks to engage up to two pre-IPO transaction advisors from “reputed professional consulting firms/ investment bankers/ merchant bankers/ financial institutions/ banks, independently (not in consortium) for facilitating or assisting Dipam in the preparatory processes leading to the IPO of LIC.”
According to the RFP, the prospective advisor can seek clarification online till June 29.
There will be a pre-bid meeting on June 30, and the bid can be submitted till July 13. LIC was established in 1956 through an Act of Parliament. Currently, the government holds 95 per cent stake in LIC and the Finance Minister had announced to partially divest its stake in the insurance major. Listing of LIC would
require amending the LIC Act and will change many structure in the company especially how it handles its surplus. The company shares five per cent surplus with government.