Life Insurance Corporation of India has announced its first bonus share issue in a 1:1 ratio, providing one bonus share for every share held. The move will double the company's paid-up equity base and reward shareholders amid the stock's underperformance since its 2022 public debut. Subject to approval, the issuance will capitalize reserves and is expected within two months.
Life Insurance Corporation of India (LIC) made the announcement on its inaugural bonus share distribution. Under the 1:1 ratio, shareholders will receive one additional share for each existing share, effectively doubling the paid-up equity capital. LIC stated this step capitalizes reserves to benefit investors directly. The Economic Times first reported the details of the proposal, which awaits shareholder and regulatory approval. It is slated for completion in about two months pending green lights. LIC's shares have lagged since the company's initial public offering in 2022, prompting this reward mechanism for loyal holders. The insurer highlighted the bonus as a response to that underperformance, aiming to bolster investor confidence without new fundraising. This marks LIC's entry into bonus issuances after years as a government-backed entity now publicly traded. The decision aligns with practices in India's insurance sector, where peers like SBI Life and HDFC Life have issued bonuses previously. LIC's market value and equity distribution will see a structural shift post-issuance, though share price adjustments typically follow such announcements to maintain value parity.