LIC IPO: ICICI Securities, J P Morgan Chase among 10 merchant bankers

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Ten merchant bankers including ICICI Securities, J P Morgan Chase & Co, and Goldman Sachs Group Inc., have been shortlisted by the government to manage the initial public offering (IPO) of Life Insurance Corporation.

The Department of Investment and Public Asset Management (DIPAM) had reviewed presentations from as many as 16 domestic and international firms to act as book running lead managers (BRLMs) for the mega IPO of country’s largest life insurer.

Once the bankers arrive at the embedded valuation of LIC, the government will file draft red herring prospectus (DHRP) with the Securities and Exchange Board of India.

The IPO – touted as the biggest share sale in the country’s history – is expected to make its debut on the domestic stock exchanges in the fourth quarter of the current fiscal year. While market regulator allows foreign portfolio investors (FPIs) to participate in the IPOs, LIC Act doesn’t have any provision for them. The government is looking at ways to align the proposed share sale with necessary rules to make room for the foreign investors.

On July 15, DIPAM had invited applications for appointment of up to 10 merchant bankers for LIC IPO with August 5 as the last day for bidding. Union Cabinet had approved the initial public offering proposal of LIC last month. The government looking to raise Rs 80,000-Rs 90,000 crore by selling its stake in the insurer.