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DIPAM starts process to empanel merchant bankers, law firms for advising on OFS

07:01 PM Sep 30, 2021 | PTI

The Department of Investment and Public Asset Management (DIPAM) has initiated the process to empanel merchant bankers and legal advisors for selling the government's stake in public sector companies.

This empanelment will be for a period of two years and comprise four categories, DIPAM, which manages government equity in CPSEs, said in a tender notice.

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The tender document has not listed names of CPSEs for disinvestment.

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"The GOI (Government of India) envisages to disinvest its shareholding in CPSE's through the Offer for Sale (OFS) through Stock Exchange Mechanism/sale of shares in stock market (Dribbling) from time to time for which this Request for Proposal (RFP) for empanelment of merchant bankers-cum-selling brokers is being floated," DIPAM said.

The last date to submit bids is October 20.

Currently, 54 CPSEs are listed on stock exchanges The merchant bankers will be required to advise the government in decision-making with respect to timing of selling shares depending on market conditions.

They will also need to undertake tasks related to all aspects of the sale of shares on the stock exchanges.

The bidders can apply for empanelment under four categories, depending upon the capacity of the bidders in handling the transactions of the capital market.

First category will be called 'A++' for a transaction size of greater than Rs 2,000 crore. Second category or 'A+' will be for a transaction size between Rs 750 to Rs 2,000 crore. Third category or 'A' will be for a transaction size of less than Rs 750 crore. The fourth category 'B' will be for sale of shares on the stock exchanges (Dribbling) and to be used for all transactions irrespective of size.

For legal advisors, DIPAM asked for bids from reputed law firms- domestic and international, with experience and expertise in initial/further public offerings in capital markets to act as legal advisors and assist the government in the process.

"The domestic law firm will act as the lead legal adviser to the issue and is required to submit proposal in consortium with an international law firm of repute, with similar experience and expertise in public offerings in capital market," it said.

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