LIC Announces 1:1 Bonus Share Issue, Shareholders to Get Equal Free Shares

Life Insurance Corporation of India has approved a landmark 1:1 bonus share issue, offering shareholders one additional fully paid-up equity share of ₹10 for every share they currently hold. The decision was taken at a board meeting held on Monday and disclosed through a regulatory filing. Capitalisation and Timeline: The bonus shares will be issued by capitalising approximately ₹6,325 crore from LIC’s reserves and surplus as of Q3 FY26. The entire process is set to be completed within two months from the date of board approval. The record date for determining eligible shareholders will be announced shortly. Government’s Investor-Friendly Initiative: This move is part of the government’s broader programme to reward investors and increase stock liquidity in the market. The bonus issue signals strong confidence in LIC’s financial strength and future growth prospects, aligning with the government’s objectives for state-owned enterprises under the Atmanirbhar Bharat initiative. Market Impact and Investor Sentiment: The bonus issue is expected to attract both existing shareholders and potential investors by making shares more affordable and liquid. Notably, the funding comes entirely from LIC’s internal reserves, requiring no external capital. This decision is seen as a positive signal to investors who had expressed concerns following LIC’s discounted listing after its May 2022 IPO, which was priced in the band of ₹902–₹949 per share. The Government of India continues to hold a dominant 96.5% stake in LIC after divesting 3.5% through the IPO, and this shareholder-friendly move reinforces the ministry’s commitment to promoting investor confidence in public sector undertakings.​​​​​​​​​​​​​​​​