Shares of Life Insurance Corporation of India (LIC) soared up to 5% on the BSE on Wednesday, reaching a day's high of ₹845. The significant market rally was triggered by the announcement of the company's first-ever bonus issue. The insurer confirmed that its board has approved a massive 1:1 bonus issue, a milestone action for its vast shareholder base of nearly 22 lakh individuals.
Anatomy of LIC's First Bonus Issue
The bonus proposal mandates that the company issue one fully paid-up equity share of ₹10 for every existing fully paid-up equity share of ₹10 held by the shareholders. This corporate action is notable as it represents the first time LIC has undertaken such a measure since its listing in May 2022.Under this plan, LIC intends to capitalize up to ₹6,325 crore from its reserves and surplus. This move utilizes a substantial portion of the company’s reserves, which stood at approximately ₹1.5 lakh crore as of December 31, 2025.
Key Timelines and Financial Implications
The bonus shares are expected to be credited to investors within two months of the board approval, specifically on or before June 12, 2026. However, the specific record date to determine eligible shareholders has yet to be announced by the company.A bonus issue involves distributing additional shares free of cost from the company's reserves to existing owners. While this dramatically increases the total number of shares outstanding, it does not alter the overall market capitalisation. Analysts note that the action is expected to improve liquidity and enhance stock accessibility for a wider range of investors.
Underlying Financial Strength and Market Performance
Financially, LIC reported robust figures in its latest available earnings. The company recorded a 17% year-on-year rise in consolidated net profit, totaling ₹12,930 crore, for the December quarter. Concurrently, net premium income demonstrated 17% growth, reaching ₹1.26 lakh crore.On a longer-term basis, the stock has shown impressive momentum. LIC shares have risen nearly 47% over the last three years. While the stock gained approximately 5% over the past month, it remains down over 5% year-to-date (YTD) for the current calendar year.
The company also confirmed that it has declared five interim dividends to date. The board's proposal is subject to necessary approvals, and LIC has not yet announced the date for its crucial March quarter results.
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