LIC IPO: Govt clears appointment of SBI Caps, Deloitte as pre-listing transaction advisors

The government has approved the appointment of SBI Caps and Deloitte as the pre-IPO transaction advisors (TAs) for the listing of Life Insurance Corporation of India (LIC), sources told CNBC-TV18. Bids to pick the actuarial firm for the life insurer's valuation will also be invited soon.

There were five players in the running to be appointed TAs for the initial public offering (IPO), namely Deloitte, Citi, Credit Suisse, SBI Capital and Edelweiss Financial Services. However, Moneycontrol had reported on July 31 that Edelweiss had voluntarily withdrawn from the shortlisting process after concerns were raised over the possible conflict of interest.

Bids for the appointment of two pre-IPO transaction advisors for LIC's mega-IPO were invited by the government in June earlier this year. The proposed listing is expected to be the biggest in the history of the Indian capital markets. LIC, which dominates India's insurance sector, is the country's oldest and biggest insurer with total assets in excess of Rs 31 lakh crore.

It is likely that the government would sell around 8-10 percent stake in insurer through the listing process. LIC is valued at Rs 9-10 lakh crore, which means that even an 8 percent stake sale could mean an IPO worth Rs 80,000-90,000 crore.

Finance Minister Nirmala Sitharaman had announced in her budget speech on February 1, 2020, a divestment of the government stake in LIC through an IPO. Currently, the government holds 100 percent stake in the life insurer.