LIC Share Price Jump 4% as Street Cheers First Ever 1:1 Bonus Issue

Mumbai, April 15:Shares of Life Insurance Corporation of India (LIC) surged nearly4per cent on April 15, as investors cheered the state-run insurer’s announcement of its first-ever bonus issue since listing, signalling confidence in its financial strength and future growth.

The stock traded at Rs 835.25 on the NSE, witnessing strong buying interest after the company approved a 1:1 bonus share issue. The rally comes after a delayed reaction to the announcement, which was made post market hours earlier this week, followed by a market holiday.

Under the bonus proposal, shareholders will receive one additional share for every share held, effectively doubling their shareholding. The move is widely viewed as a positive corporate action aimed at enhancing liquidity and broadening investor participation.

The bonus issue will be funded by capitalising reserves worth over ₹6,300 crore, converting accumulated profits into equity without any cash outflow. This is a significant milestone for LIC, marking its first such shareholder reward since its listing in 2022.

Why the Street is Cheering

Analysts and market participants see the bonus announcement as a signal of strong balance sheet health and management confidence. Bonus issues typically improve stock affordability, which can attract greater retail participation and increase trading volumes.

The move also carries strategic implications. The Government of India currently holds about 96.5 per cent stake in LIC and is required to gradually reduce its holding to meet minimum public shareholding norms. Expanding the equity base through a bonus issue could facilitate future stake sales via offer-for-sale (OFS) routes.

Liquidity Boost in Focus

One of the key objectives behind the bonus issue is to improve liquidity in the stock. LIC shares have historically seen relatively lower free float, and a higher number of outstanding shares post-bonus could make the stock more accessible to a wider investor base.

Additionally, the move aligns with LIC’s broader strategy of enhancing shareholder returns. Since listing, the insurer has maintained a steady dividend payout track record, and the bonus issue adds another layer to its capital return approach.

What Investors Should Watch

Going ahead, market participants will track how the stock behaves and whether increased liquidity translates into sustained investor interest.

For now, the Street’s verdict is clear: LIC’s bonus move has injected fresh momentum into the stock, turning it into one of the key gainers against an otherwise volatile market backdrop.

Source: NSE