Supreme Court refuses to stay LIC IPO; Issues notice to centre

The Supreme Court on Thursday refused to interfere with the LIC IPO. However, it has issued notice to the Centre relating to the petitions challenging the validity of the LIC IPO.

According to the pleas, the IPO violates certain sections of the LIC Act, 1956.

The petitioners have filed the case in the apex court to issue a writ of mandamus, to declare Section 5 of the Life Insurance Corporation Act, 1956 (as amended by the Life Insurance Corporation (Amendment) Act, 2011) to be void and inoperative to the extent the capital of the corporation is characterised as 'equity capital', and to declare Sections 130, 131, 134, and 140 of the Finance Act, 2021 and Sections 4,5,24 ad 28 of the Life Insurance Corporation Act, 1956 (as amended by the Finance Act, 2021) to be void and inoperative for being ultra vires Articles 14 read with Article 300A of the Constitution.

The Supreme Court will now examine the validity of the amendments to the LIC Act, 1956 through the Finance Act, 2021.

The court noted that the IPO has received bids from 73 lakh applicants and it is expected to fetch Rs 22,500 crore to the government.

The issue has been subscribed nearly 3 times where policyholders have bid for over 6 times their assigned quota.

The interest of foreign investors has remained subdued in the IPO.

Also, the employee quota was oversubscribed 4.39 times.

The retail investors bid for nearly 2 times their assigned quota.