LIC shareholders approve historic 1:1 bonus issue worth ₹6,352 crore
Synopsis
LIC has cleared its first-ever bonus share issue — a 1:1 allotment worth ₹6,352 crore that will double its paid-up capital to ₹12,649 crore. Coming on the back of a 17% profit jump and surging premium income, the move signals a structural shift in how India's largest insurer is rewarding shareholders, even as the stock trades nearly 7.5% in the red year-to-date.
Key Takeaways
LIC received shareholder approval for its first-ever bonus issue on 18 May 2025 .
Shares will be allotted in a 1:1 ratio (face value ₹10 ), worth a total of ₹6,352 crore .
Paid-up capital will double from 632 crore shares to 1,264 crore shares , valued at approximately ₹12,649 crore .
LIC posted a 17% rise in net profit to ₹12,958 crore in Q3 ended December 2025 .
LIC stock closed 0.97% lower at ₹791.40 on the NSE on Monday, down 7.43% year-to-date.
An earnings call with analysts is scheduled for Thursday at 7 pm IST .
Life Insurance Corporation of India (LIC) on Monday, 18 May 2025, received shareholder approval for its first-ever bonus share issue — a 1:1 allotment of fully paid-up equity shares worth ₹6,352 crore. The landmark decision will effectively double the state-owned insurer's paid-up share capital, marking a significant milestone in LIC's post-listing corporate history.
What the Bonus Issue Means
Under the 1:1 ratio, shareholders will receive one new bonus equity share for every existing share held. Each share carries a face value of ₹10. Following the allotment, LIC's paid-up share capital will rise from 632 crore shares to 1,264 crore shares, with the monetary value of post-issue capital standing at approximately ₹12,649 crore. The corporation is required to complete the issuance within two months of the approval date.
Strong Quarterly Earnings Backdrop
The bonus issue comes against a backdrop of robust financial performance. LIC reported a 17% jump in net profit to ₹12,958 crore in the third quarter ended December 2025, up from ₹11,056 crore in the same quarter a year earlier. Net premium income climbed to ₹1,25,613 crore from ₹1,06,891 crore in the year-ago period, while total income rose to ₹2,33,984 crore from ₹2,01,994 crore — reflecting broad-based business expansion across India's largest insurer.
Stock Performance and Market Reaction
Despite the shareholder approval, LIC's stock closed 0.97% lower at ₹791.40 per share on the National Stock Exchange (NSE) on Monday, underperforming the Nifty 50 index, which edged 0.03% higher. The stock has declined 7.43% year-to-date and 7.65% over the past 12 months, suggesting that investor sentiment around the counter remains cautious despite improving fundamentals.
Analyst Call Scheduled
LIC has announced an earnings call with analysts and investors on Thursday at 7 pm IST to discuss financial results for both the quarter and the full year ended 31 March 2026. The call is expected to provide further clarity on the bonus issue timeline, capital allocation strategy, and the corporation's outlook for the current financial year. Notably, this is the first bonus issue in LIC's history since its listing on Indian exchanges in 2022, and signals growing confidence among its board and shareholders in the insurer's long-term earnings trajectory.
Point of View
As the dominant shareholder, is comfortable rewarding retail investors who bought in at the IPO and have since sat on losses. But the stock's 7.43% year-to-date decline tells a more complicated story: improving profits and premium income have not translated into price recovery. The bonus issue doubles the share count without adding intrinsic value, and with the stock already under pressure, the move risks diluting per-share metrics further unless earnings momentum accelerates. The real question for Thursday's analyst call is whether LIC can articulate a credible path to closing the gap between its improving fundamentals and its lagging market valuation.
NationPress
3 Jul 2026
Frequently Asked Questions
What is LIC's 1:1 bonus issue?
LIC's 1:1 bonus issue means shareholders receive one new fully paid-up equity share for every existing share held, at no additional cost. The total allotment is valued at ₹6,352 crore, and it is the first bonus issue in LIC's history since its stock market listing.
When will LIC complete the bonus share allotment?
LIC is required to complete the bonus share allotment within two months of the shareholder approval granted on 18 May 2025. The exact record date is yet to be officially announced.
How will the bonus issue affect LIC's share capital?
LIC's paid-up share capital will double from 632 crore shares to 1,264 crore shares. The monetary value of the post-issue capital will rise to approximately ₹12,649 crore.
How did LIC perform financially in Q3 December 2025?
LIC reported a 17% increase in net profit to ₹12,958 crore in Q3 ended December 2025, compared to ₹11,056 crore a year earlier. Net premium income rose to ₹1,25,613 crore and total income climbed to ₹2,33,984 crore in the same period.
Why is LIC's stock still under pressure despite the bonus issue?
LIC's stock closed 0.97% lower at ₹791.40 on the NSE on Monday, and is down 7.43% year-to-date. Analysts note that a bonus issue does not add intrinsic value and investor sentiment remains cautious, even as the insurer's underlying financials have improved.
