The government has appointed merchant bankers and legal advisors for minority stake sales in LIC, and other public sector financial institutions, Department of Investment and Public Asset Management Secretary Arunish Chawla said on Friday.
"As far as LIC is concerned, we have completed the RFP process. The process for appointment of merchant bankers and legal advisors has been completed." Chawla said, adding that the merchant bankers will work for all financial institutions.
In February, DIPAM had invited bids from merchant bankers and legal firms to assist the government in divesting its stake in public sector banks and listed financial institutions.
As per the two RFPs (Request for Proposal) floated by DIPAM, the merchant bankers and legal advisors would be empanelled for three years, which could be extended by one more year.
"Individual transactions can happen anytime over the next three years." Chawla said, adding that merchant bankers will look after all the transactions related to financial institutions and public sector banks.
DIPAM, which is under the Finance Ministry, manages government shareholding in public sector entities.
Currently, a host of public sector banks and financial institutions are yet to meet the minimum 25% public shareholding norm as mandated by the market regulator Sebi.
The government has set Aug. 1, 2026, as a deadline for such non-compliant entities to reduce Government holding and meet public float norms.
The government currently holds a 96.5% stake in LIC. It had sold 3.5% through an initial public offering in May 2022 at a price band of Rs 902-949 a share. The share sale fetched the government around Rs 21,000 crore.
The government needs to offload another 6.5% stake in the public sector life insurer to meet the mandated 10% public shareholding requirement by May 16, 2027.
Also, five PSU banks are yet to meet the minimum public shareholding norm.
The government currently holds a 98.3% stake in Punjab & Sind Bank, 96.4% in Indian Overseas Bank, 95.4% in UCO Bank, 93.1% in Central Bank of India and 86.5% in Bank of Maharashtra.
It holds an 86.36% in the financial institution IRFC, 85.44% in the insurance company The New India Assurance, and 82.40% in General Insurance Corp.
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