LIC Board Approves 1:1 Bonus Share Issue for Shareholders

The Life Insurance Corporation of India (LIC), the largest public sector life insurance provider in India, has received approval from its board to issue bonus shares in a 1:1 ratio. This means that eligible shareholders will receive one additional equity share for every share they currently hold. This decision marks the first time LIC will issue bonus shares since it became publicly listed in 2022.

In a regulatory announcement made on April 10, 2026, the state-run insurer indicated that eligible investors will obtain the new shares on the record date, yet to be disclosed. Each new share will have a face value of ₹10. The company is looking to capitalise shares amounting to ₹6,325 crore through this initiative, which will require the approval of shareholders.

As part of this plan, LIC's paid-up capital, currently at ₹6,325 crore, will double to ₹12,650 crore following the bonus issuance, making it a significant corporate action for the firm. The shares are expected to be credited to the demat accounts of eligible shareholders on or before June 12, 2026, according to the company's filing.

The announcement follows a positive trend for LIC’s shares, which closed at ₹809 on the National Stock Exchange of India (NSE), an increase of 1.3% on the day of the board's decision. This performance is notable against a backdrop of broader market declines, showing the company’s relative strength.

Investors have previously benefited from dividend announcements made by LIC over the past four years, although this bonus issuance is set to provide a different form of shareholder reward. With a market share of 57.07% in the Indian life insurance sector, based on first-year premium income as of December 31, 2025, LIC remains a dominant force in the market according to reports from the Insurance Regulatory and Development Authority of India (IRDAI).

The issuance of bonus shares is seen as a strategic move to enhance shareholder value, similar to the distribution of dividends. This kind of corporate action serves to reward existing investors and is typically received positively in the equities market.

Overall, the approval of the bonus shares underlines LIC's commitment to engaging and rewarding its investors in a competitive financial landscape. With the expected increase in paid-up capital, investors are keenly watching how this strategy will unfold in the coming months.