Indian government is considering allowing foreign institutional investment of up to 20% in Life Insurance Corporation, according to a government source said in a release on Wednesday. As per Sebi (Securities and Exchange Board of India) rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation. The government has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial public offering of country's largest insurer LIC. The listing of LIC is set to be India's biggest ever IPO, with the government aiming to raise up to Rs 90,000 crore ($12.24 billion) from its stake sale. Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd, a circular on the divestment department website said. The disinvestment department had invited applications for the appointment of merchant bankers on July 15. Following this, 16 merchant bankers made presentations for managing listing and partial disinvestment of Life Insurance Corporation (LIC). The Department of Investment and Public Asset Management (DIPAM) is also in the process of appointing a legal adviser for the stake sale and the last date for putting bids is September 16. Actuarial firm Milliman Advisors LLP India has already been appointed to assess the embedded value of LIC ahead of the IPO, which is likely in the January-March quarter of 2022. The government is also mulling allowing foreign investors to pick up stakes in the country's largest insurer LIC. The Cabinet Committee on Economic Affairs had last month cleared the initial public offering proposal of Life Insurance Corp of India. The ministerial panel known as the Alternative Mechanism on strategic disinvestment will now decide on the quantum of stake to be divested by the government. "The potential size of the IPO is expected to be far larger than any precedent in Indian markets," the department had said. The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 trillion for 2021-22 (April-March). So far this financial year, Rs 8,368 crore has been mopped up through minority stake sales in PSU and the sale of SUUTI (Specified Undertaking of the Unit Trust of India) stake in Axis Bank. The government has recently again floated a request for proposal (RFP) to appoint a legal advisor to assist the LIC IPO as the first tender failed to receive adequate response from law firms. In the revised RFP, the Department of Investment and Public Asset Management (DIPAM) has specified that the time limit for validity of the financial bids shall be three years implying that the law firm will assist LIC and the government for three years from the time of placing the bid. The previous bid document had stated bidders cannot prescribe any time limit for validity of the financial bid, keeping the timeline of their work open-ended. The timeline has been introduced to precisely define the scope of work of legal advisors. Law firms will have to submit their bids by September 16. The bids will be opened the next day, and the selected intermediary would be intimated.