Sixteen merchant banks are in the row to act as book running lead managers (BRLM) for the initial public offering of Life Insurance Corporation of India (LIC).
These merchant banks will have to deliver a presentation before the Department of Investment and Public Asset Management (DIPAM) on August 24-25. The shortlisted banks are BNP Paribas, Citigroup Global Markets India, BofA Securities, Goldman Sachs (India) Securities, HSBC Securities and Capital Markets(India), J.P. Morgan India, Nomura Financial Advisory and Securities (India), Axis Capital, DAM Capital Advisors, HDFC Bank, ICICI Securities, IIFL Securities, JM Financial, Kotak Mahindra Capital, SBI Capital Market, and Yes Securities India.
Financial offers placed by these bankers will be opened after all the presentations are over.
The government is looking to assign up to ten BRLMs with experience in public offerings, and will have to form a team. The BRLMs, in consultation with the government, will form a syndicate as needed under the SEBI guidelines. The government also has the option of appointing additional syndicate members if necessary.
Merchant bankers will be demanded to structure the IPO as per the existing framework of Securities and Exchange Board of India (Sebi). They will also be required to undertake owed diligence activities and prepare the draft red herring prospectus (DRHP). They will be required to recommendate the government on regulatory norms and assist in securing approval and exemptions, wherever necessary, from all applicable regulatory agencies including Sebi, Reserve Bank of India (RBI) and Insurance and Regulatory Development Authority of India (IRDAI) as well as stock exchanges.
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. A part of the public offering might be reserved for employees and policyholders of LIC.