18 i-banks are in the fray for mega LIC IPO mandate

Eighteen investment banks are competing to manage the initial public offering (IPO) of Life Insurance Corp. of India, which is set to be the biggest share sale in the country, three people aware of the selection process said. The last date to submit bids was Friday.

Domestic banks that have bid for the IPO include Kotak Mahindra Capital, Axis Capital, ICICI Securities, JM Financial, DAM Capital, Edelweiss, HDFC Bank, Yes Securities, SBI Capital and IIFL, while foreign investment banks in the running include Citi, Bank of America, HSBC, Goldman Sachs, JPMorgan, BNP Paribas, Nomura and CLSA, the people cited above said on condition of anonymity.

“Now, there will be pitches by all the banks that have bid for the mandate, and the final list of banks that get selected for the deal will be finalized by the end of this week or early next week,” one of the three people said.

“The disinvestment department hasn’t given a firm indication of the size, but the IPO will be a mix of stake sale by the government and fresh fundraising for LIC, and on the timeline, they have said that the IPO will happen in this financial year,” the person added.

Up to 10 banks will be selected for the IPO, the department of investment and public asset management (Dipam) had said while inviting bids.

The banks will be scored on various parameters such as past experience of handling IPOs of over Rs5,000 crore in size, expertise in life insurance, qualification of team members, marketing strategy, strength in drawing retail participation and global distribution capabilities.

Banks also have to indicate the valuation approaches to be followed in determining the IPO price, along with an estimated value.

A mere 10% stake in LIC is estimated to be worth at least ₹1 lakh crore, which will make it one of the most valuable companies in India, Mint reported earlier.