Supreme Court declines to interfere in LIC IPO

The Supreme Court on Thursday (May 12) refused to interfere in the IPO of Life Insurance Corporation (LIC) and halt the share allotment process.

The apex court, however, issued notices on petitions challenging the Centre’s decision to trade 5 per cent of its shareholding in LIC through IPO.

A bench of justices DY Chandrachud, Surya Kant and PS Narasimha said that questions raised by the petitioner on the passage of the Finance Act, 2021, as a money bill and the amendments to the LIC Act, 1956 – which facilitated the LIC IPO – would “warrant further deliberation”.

While a similar case (Rojer Mathew case) pertaining to the passage of the Finance Act, 2017 as a money bill is pending with the apex court, the court said a larger bench will hear both the petitions together.

Observing that huge investments have been made in the IPO so far, the court said it would not be right to interfere in the IPO at this point of time.

“We are inclined to issue notice. On the question of Section 28 of the LIC Act, the submission by the petitioner would warrant further deliberation. The court has been apprised of the fact that 73 lakh applicants have subscribed to the IPO and it has been subscribed over six times even in the category which has been reserved for policy holders,” the bench said.

“It is necessary to note that the dilution of LIC has been 3.5 per cent. 22.13 crore equity shares of face value are being offered at premium of INR 939 and receipts in the Consolidated Fund of India is of ₹20,500 crore; IPO opened for anchor investors on May 2, 2022. For General Public on May 4 and closed on May 9; IPO has been oversubscribed.”

The court said the above observation make enough grounds for it to decline the grant of interim relief against the IPO.

The bench was hearing a writ petition challenging the amendments to the LIC Act and petitions challenging the orders of the Madras and Bombay high courts which had declined to interfere in the IPO process.