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LIC Initial Public Offer to be Managed by 10 Top Merchant Bankers!

05 August 20226 mins read by Angel One
LIC Initial Public Offer to be Managed by 10 Top Merchant Bankers!
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The LIC IPO is keeping investors across all segments occupied with its prospects. However, the government is yet to announce concrete details regarding the public offer’s timeline and issue size. This is because the public offer is still in the planning process, which is advancing at a rapid speed. The government has appointed 10 lead bankers to manage this upcoming public offer as per the latest development.

Here’s more on it!

So, Who are the Lead Managers for LIC IPO?

Previously, 16 banking institutions, including 7 international and 9 domestic banks, were considered to lead this upcoming IPO.

However, recently, the government declared that a total of 10 banking entities have been selected to head the most awaited IPO of this year.

These following entities will be closely involved in managing this public offer:

  • SBI Capital
  • Goldman Sachs
  • JP Morgan
  • Citigroup
  • JM Financial
  • Bank of America
  • ICICI Securities
  • Kotak Mahindra Capital
  • Nomura
  • Axis Capital

As per reports, these merchant bankers were chosen from among 16 banking institutions that made a presentation to a closely-knit inter-ministerial group last Thursday on 26 August 2021.

What were the Parameters for the Selection of Lead Bankers?

Some parameters that were taken into consideration include:

  • Their experience in handling large IPOs, preferably with a size of over Rs. 5,000 crores
  • Experience in the life insurance segment
  • Efficiency of marketing strategy
  • The capability of global distribution
  • Proficiency in drawing retail participation
  • Qualification of their managerial team

Besides these, the merchant bankers in the running had to present different approaches to valuation that could be used to finalise IPO price and overall value.

Exceptions to Lead Manager Selection: In a Nutshell

Previously merchant bankers could quote a minimum of Re. 1 to secure marquee disinvestment deals backed by the government. However, in the case of LIC public offer a minimum of Rs. 1 crore as fees for each participating bank is the said syndicate.

Other Key Developments for this Upcoming IPO

These are among the major developments with regards to this public offer:

  • First, the government will bear all expenses concerning brokerage fees.
  • The expected brokerage will be as follows:
  • For retail investors: 0.35% on allotment
  • In case of non-retail investors: 0.15% on allotment
  • For policyholders or eligible staff: 0.25% on allotment
  • Processing fees for both applications backed by blocked accounts and UPI will be borne either by the government or LIC. However, such a move will be carried out only in case of the expectation of large retail participation.
  • Also, the board of directors of this largest investor is likely to be restructured. In addition, the largest insurer in India is also expected to refresh its accounting norms before its public offer.

It is still expected that the government could bring in anchor investors to park a maximum of Rs. 25,000 crores in the LIC shares.

Final Takeaway

With the appointment of lead managers, LIC is one step closer to its public offer. That said, the government is yet to undertake key decisions with regard to other aspects of this upcoming IPO.

That said, it is expected that the insurer will soon announce its IPO size. Alternative Mechanism on strategic Divestment, a ministerial panel is already proactively working on it and could soon make a concrete announcement regarding the issue size.

So far, it is expected that the disinvestment could be of nearly 10% and will be carried out in two tranches. Therefore, stag investors who are invested in the developments of LIC IPO should keep a close tab on these expected developments to gauge the market temperament surrounding this public offer.

Keep an eye on Angel One blogs to catch all the latest happenings of the IPO world!


Frequently Asked Questions

  1. What is the LIC IPO size?

LIC is yet to announce its IPO size. However, it is believed that the LIC IPO size will be larger than all other preceding public offers.

  1. Who is LIC IPO’s registrar?

LIC has not shared any details regarding its upcoming IPO.

  1. What is LIC IPO share’s face value?

The face value of its shares is Rs. 10.

  1. What is LIC’s asset valuation?

LIC has an asset valuation of more than Rs. 34 lakh crores or $461.4 billion.


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