LIC Bonus Share Ratio: Life Insurance Corporation (LIC) shares are in momentum on Wednesday (April 15) as its board has approved a bonus issuance of equity shares in a 1:1 ratio. Life Insurance Corporation (LIC) has announced to issue bonus shares to its investors for the vey first time since its IPO listing in May 2022. The bonus share announcement by LIC has come despite the stock remaining well below its IPO issue price of Rs 949.
LIC board has fixed the bonus issue ratio at 1:1. It means that the insurance behemoth will issue one bonus share for every existing one share of Rs 10 face value. LIC bonus shares will also carry a face value of Rs 10.
"Considered and approved the issuance of bonus equity shares in the proportion of 1:1, i.e., 1 (One) fully paid up equity share of Rs 10 each for every 1 (one) fully paid-up equity share of Rs 10 each held by the Members of the Corporation as on the Record Date,.." LIC said in an exchange filing.
LIC BOnus Share Impact On Stock Price
A bonus is one of the corporate actions which listed companies announce. LIC bonus will have an impact on its share price as well.
When a corporate action takes effect, the shares' price is adjusted accordingly. In case of LIC bonus issue, the share price, as on the record date, will adjust in the ratio of 1:1. It means that each share's price will become 50 per cent cheaper.
Suppose LIC shares command a price of Rs 850 on the ex-date, then LIC share price will become Rs 425.
Similarly, the total quantity held in the demat account (number of shares) will double. If a person owns 500 shares of LIC in his/her demat account on the record date, then the total quantity will double and become 1000 shares.
LIC Bonus Share Record Date
LIC will issue bonus shares to its shareholders, subject to their eligibility on the record date. LIC didn't announce the bonus record date in its latest filing.
LIC bonus share record date will be announced in due course and shareholders will be informed through the exchanges.
LIC said that it will issue bonus shares by capitalising Rs 6,325 crore out of reserves and surplus available with LIC as of December 31, 2025.
LIC bonus issue will lead to doubling of the company's paid-up equity capital to Rs 12,650 crore from Rs 6,325 crore.
LIC bonus issue also results in an increase in the increase of total number of outstanding shares in the market. LIC's total number of shares in the market will increase to 1,265 crore from 633 crore.
LIC shares have remained under pressure since listing. On Wednesday (April 15) afternoon, LIC shares traded at Rs 833 on NSE.
LIC is a government-owned company. The government owns 96.5 per cent stake in LIC. Through the IPO, the government had sold 3.5 per cent stake, raising around Rs 21,000 crore.
