LIC IPO: Banks get simply 0.06% of proceeds to address India's biggest float
According to LIC's very last provide report, the organization shelled out simply Rs 11.8 cr as fee to ee-e book jogging lead managers, or nine.nine% of overall trouble expenses
The authorities needed to pay simply zero.06 consistent with cent of the proceeds to funding bankers for coping with the mega proportion sale of Life Insurance Corporation of India (LIC). According to the very last provide report filed with the aid of using LIC, the organization shelled out simply Rs 11.eight crore as fee to ee-e book jogging lead managers (BRLMs). This changed into nine.nine consistent with cent of the entire trouble fee of almost Rs one hundred twenty crore and zero.06 consistent with cent of overall IPO proceeds of Rs 20,557 crore. The IPO changed into totally a secondary proportion sale with the aid of using the authorities, which diluted three.five consistent with cent of its maintaining in LIC.
All the ten BRLMs had agreed to paintings at the LIC mandate for the bottom charge of Rs 1 crore every set with the aid of using the authorities. “Investment bankers gets a complete of Rs 10 crore for coping with the LIC proportion sale. The extra Rs 1.eight crore proven withinside the provide report is resulting from GST,” stated an funding banker.
The funding banks that dealt with the percentage sale have been Kotak Mahindra Bank, Axis Capital, Bofa Securities, Citibank, Nomura, Goldman Sachs, ICICI Securities, JM Financial, JP Morgan and SBI Capital Markets. LIC’s IPO will increase the league desk status for all of the 10 banks for the 12 months 2022, that can show useful even as bidding for destiny mandates.
The different IPOs with the aid of using state-owned corporations to hit the marketplace given that 2021, Railtel and Indian Railway Finance Corporation (IRFC) had paid Rs 16.five crore and Rs 4.zero crore to funding bankers.
The expenses paid on PSU mandates is simplest a fragment of that paid for non-public area IPOs.
Last 12 months, Paytm coughed up Rs 324 crore, 1.eight consistent with cent of its IPO proceeds of Rs 18,three hundred crore, even as Zomato paid Rs 229 crore. The recently-concluded Delhivery IPO paid Rs one hundred and five crore, 2 consistent with cent of its trouble size.
LIC needed to spend Rs forty crore on broking commissions. Industry gamers stated the provider needed to pay a fee among 15 foundation factors and 35 foundation factors to agents for garnering subscriptions from person traders. The fee is paid simplest on packages that get allotment. In LIC’s IPO over 6 million small traders were given allotment for shares.
LIC paid expenses of Rs 4.three crore to felony counsels, the provide report showed. In a statement, Cyril Amarchand Mangaldas recommended LIC and the authorities at the IPO. Besides, BRLMs had their separate felony counsels.
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