Indian law firms reluctant to uncover on IPO of insurance protection huge LIC -sources

A bird flies previous a brand of Life Insurance protection Corporation of India (LIC) at one of its offices in Unique Delhi, India September 14, 2021. Image taken September 14, 2021. REUTERS/Anushree Fadnavis

  • Legislation firms stretched by corporate IPO market increase
  • Three top Indian law firms did no longer uncover in first delicate -source
  • Insurance protection firm LIC's gargantuan dimension, complexity a deterrent -lawyers
  • Wretched govt fee for law firms one other dampener -lawyers

MUMBAI, Sept 15 (Reuters) - India's plans to checklist notify-hotfoot Life Insurance protection Corporation (LIC) face an unfamiliar effort: home law firms are shying far from advising the authorities, deterred by the low costs on provide on the time of a profitable increase in corporate stock listings.

With millions of policyholders and a portion of 66% of most modern top fee collections in a crowded insurance protection market, LIC is a family name, managing resources of more than $450 billion.

The authorities is scrambling to checklist the insurance protection behemoth by March, in an exercise space to be India's most attention-grabbing IPO, at a probable $12 billion. As many as 16 global and home investment banks no longer too long within the past uncover to tackle it. be taught more

Nonetheless top law firms that would possibly possibly possibly possibly in total be mad about such gargantuan-designate IPOs to raise their credibility in authorities circles are hesitant to uncover Unique Delhi, as their groups are stretched by the company IPO increase, 5 law firm partners told Reuters.

"Most gargantuan law firms in India are overburdened with IPO work," said Nitin Potdar, an M&A accomplice at top Indian law firm J. Sagar Pals. "And the LIC IPO would need proper gargantuan groups of experienced lawyers."

LIC's huge dimension and intricate industry construction and products create it a "nightmare" for lawyers to draft the prospectus, he added.

The unappealing costs are one other dampener, said law firm partners, who spoke on condition of anonymity to lead clear of authorities reprisals.

The finance ministry, which is dealing with the IPO route of, did no longer at this time acknowledge to requests for observation.

Thursday is the deadline for the law firms to submit bids.

Refinitiv records presentations India has about $6 billion worth of IPOs within the pipeline. be taught more

After food-shipping huge Zomato's $1.2 billion IPO in July, digital payments firm Paytm and lope-hailing huge Ola are eyeing market debuts, keeping lawyers busy and their cash registers ringing.

In an embarrassing episode, the authorities has twice revised its provide to intention law firms for the LIC IPO.

In early September, after an initial lacklustre response, Unique Delhi restricted the timeline of the firms' IPO work to some years.

Leading firms, a lot like Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas and Khaitan & Co, would in total be mad about a authorities IPO of this dimension, however did no longer uncover within the first delicate, sources attentive to the topic said.

The three firms did no longer acknowledge to queries from Reuters.

Executive officers moreover no longer too long within the past called a few top law firms and nudged them to enroll in in IPO work, said three law firm partners aware of the discussions.

This week, the authorities eased its fee fee timetables, to give 50% fee after the draft IPO prospectus is filed.

Nonetheless the IPO work on LIC is tremendous and intricate, the law firm partners said, which makes them even less keen.

Legislation firms must kind out 36 tasks on the authorities's to-form checklist for LIC, from drafting the IPO papers, and fielding regulators' queries to reviewing corporate governance and pending litigation, and analysing risks.

The volume of work wished would be as grand as for 5 private IPO deals, and light "it can possibly no longer be remunerative," said one top accomplice in an Indian law firm.

Reporting by Abhirup Roy and Aditya Kalra; Additional reporting by Aditi Shah in Unique Delhi and Scott Murdoch in Hong Kong; Editing by Clarence Fernandez

Our Standards: The Thomson Reuters Belief Tips.

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