Synopsis
LIC announced its first ever 1:1 bonus issue, a sign of strong financial health and rewarding shareholders. This decision will increase liquidity without impacting market capitalization. Supported by solid profit growth in the third quarter, the insurer continues to show steady performance, even if its stock shows mixed trends in the short and medium term.
ETMarkets.comLIC announces the first bonus issue, a sign of confidence and reward for shareholders.The insurance giant Life Insurance Company of India (PFR) announced a 1:1 bonus issue, marking the first-ever bonus issue for its nearly 22 lakh shareholders. The company’s board of directors reviewed and approved the corporate action at its meeting on Monday.
LIC said it would issue one fully paid equity share of Rs 10 each for every fully paid equity share of Rs 10 each held by eligible shareholders as on the record date. He added that he would publish the free actions by capitalizing up to Rs 6,325 crore from its available reserves and surplus as on December 31, 2025, which stood at nearly Rs 1.5 lakh crore. This is, however, subject to approvals.
LIC Bonus Issuance Timeline
LIC noted that the bonus shares will be credited within two months from the date of board approval, i.e. on or before June 12 this year.
Only shareholders holding shares of the company on the registration date will be able to benefit from free shares. The registration date for the LIC bonus issue is yet to be determined.
A bonus award consists of free shares distributed by a company from its reserves and is often seen as a sign of good financial health and growth prospects. While the issuance of free shares increases the total number of shares outstanding, it does not change the market capitalization of the company. However, it may improve liquidity and affordability, allowing more investors to add the company’s shares to their portfolios.
While this is the first bonus issue announced by the PSU company, LIC has so far announced five interim dividends since its May 2022 IPO.
LIC Q3 Overview
For the December quarter, LIC reported a 17 per cent year-on-year increase in its consolidated net profit at Rs 12,930 crore, compared to Rs 11,008 crore in the same period last year. Net premium income for the third quarter of FY26 stood at Rs 1.26 lakh crore, up 17 per cent from Rs 1.07 lakh crore a year earlier. The company has not yet announced the date of its January-March quarterly results.
LIC Shares have gained about 5% in a month, but are down more than 5% since the start of the year. In the longer term, the stock has gained nearly 47% in three years.
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