In April, Life Insurance Corporation (LIC) on Monday said its board has approved a bonus issuance of equity shares in 1:1 ratio. The bonus issue will be done by capitalising Rs 6,325 crore out of reserves and surplus available with LIC as of December 31, 2025.
How the Bonus Affects the Price
Under the 1:1 bonus issue, the company issues one free additional share for every one share you hold. To account for this, the stock price adjusts to exactly half its previous value. While your individual shares drop in price, the total number of shares you own doubles, meaning no shareholder value has been destroyed.
LIC has fixed May 29, 2026 as the official record date for its maiden 1:1 bonus issue, which will distribute one free share for every existing share held.
The government currently holds 96.5 per cent stake in LIC. It sold 3.5 per cent through an IPO in May 2022 at a price band of Rs 902-949 a share. The share sale fetched the government around Rs 21,000 crore.
The bonus issue would pave way for further share sale or offer for sale (OFS) of LIC. The government is working on plans to come out with an OFS of LIC.
