The issue, announced on Monday, would double LIC’s paid-up equity base. The bonus reward comes amid a protracted underperformance of the LIC stock, which has failed to sustainably hurdle both the offer and listing prices over four years.
The stock now trades at a near 15% discount to the IPO price. Shareholders will receive one fully paid-up equity share of ₹10 each for every share held on the record date, the company said in an exchange filing.
The bonus issue will involve the capitalisation of reserves worth about ₹6,325 crore, with the stock being issued out of the insurer’s reserves and surplus of more than ₹14.64 lakh crore at the end of December 2025.
Post-issue, LIC’s paid-up equity capital would rise to about ₹12,650 crore from ₹6,325 crore currently, while the number of outstanding shares will increase to roughly 12.65 billion from 6.33 billion.
This is the first time LIC is paying shareholders through equity distribution, a common route for companies with large, accumulated reserves. The issuance remains subject to shareholder approval. The insurer expects to complete the allotment of bonus shares within two months of board approval by June 12. Shares of LIC rose 0.71% to ₹804.25 on the BSE on Monday, even as the benchmark index declined 0.91%, as investors reacted to the board meeting to consider the insurer’s first bonus issue since its 2022 listing. LIC has issued five dividends since listing.
Despite the positive trigger, the stock continues to trade below its May 2022 IPO price of ₹949 and listing price of ₹875, even as the company’s profitability metrics have improved.
