LIC, India's oldest insurance company and the nation's sole state-owned life insurer, holds a 68% market share. The corporation was founded in 1956, and its assets are estimated to be worth around Rs 32 lakh crore in 2020-21. LIC's listing is expected to generate over Rs 1 lakh crore for the Narendra Modi government this fiscal year, and it believes it is on track to meet its disinvestment target for the year. As a whole, LIC is expected to be valued at more than Rs 10 lakh crore, surpassing the market capitalization of the vast majority of government-owned corporations. 

The government has so far started to prepare for the listing of LIC. It has proposed an amendment to the LIC Act, 1956 through Finance Act, 2021 to facilitate higher share of profits to shareholders in line with the approaches adopted by other insurance companies. The amendments also permit the government to reduce to 51% its stake in the life insurer, but this is only an enabling provision. The cabinet approved LIC's initial public offering (IPO) earlier this month. The government also put out a call for proposals to hire book running lead managers, legal advisors, and others to help with the IPO preparations.

However, there is an unusual problem with India's plans to list the state-owned Life Insurance Corporation (LIC): national law firms are reluctant to advise the government because of the low fees offered during the time of a lucrative boom in stock market listings. “The prospectus for LIC is a ‘nightmare’ for lawyers because of its enormous size and complicated business structure and products,'' said Nitin Potdar, an M&A partner at top Indian law firm J. Sagar Associates. Leading companies such as Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas and Khaitan & Co would normally be eager for such large box office listings to boost their credibility in government circles  but did not bid in the first tender. Law firms must complete 36 tasks on the government's LIC to-do list, ranging from preparing listing papers and submitting regulatory inquiries to reviewing corporate governance, pending litigation, and risk analysis. The work involved would equal five private IPO agreements' worth, and the outcome still wouldn't be advantageous to the firms. Moreover, the RFP had kept the time limit open ended as it's difficult to contemplate the time it will take to complete the IPO.  However, now the government has come up with a new revised proposal in which they have modified the time period of legal advice to three years.