LIC 1:1 bonus share explained: What 21 lakh shareholders need to know before buying on record date

Life Insurance Corporation of India (LIC) has fixed May 29 (Friday) as the record date to determine the eligibility of shareholders for the state-run insurer's first-ever bonus issue in the ratio of 1:1.

The insurance behemoth's board in April approved the plan to issue one fully paid-up equity share of Rs 10 each for every fully paid-up equity share of Rs 10 each held by eligible shareholders as of the record date. The company added that it will issue the bonus shares by capitalising up to Rs 6,325 crore out of its reserves and surplus available as of December 31, 2025, which stood at nearly Rs 1.5 lakh crore.

A bonus issue consists of free shares distributed by a company from its reserves and is often seen as a sign of strong financial health and growth prospects. While the issue of bonus shares increases the total number of outstanding shares, it does not change the company’s market capitalisation. However, it can improve liquidity and affordability, allowing more investors to add shares of the company to their portfolios.

How can you be eligible for LIC's bonus issue?

Only those shareholders who own the shares of the company in their demat accounts as on the record date will be eligible to receive the bonus shares. Due to SEBI's T+1 settlement norm, investors must buy the company's shares at least one trading day before the record date to ensure they are credited to their demat accounts by that date and thus be eligible for the corporate action.

Since the previous day, that is May 28 (Thursday) is a market holiday on account of Bakrid, May 27 (Wednesday) will effectively be the last date to buy the shares of the company in order to be eligible to receive the bonus shares.

While this marks the first bonus issue announced by the PSU company for its more than 21 lakh shareholders, LIC has so far announced five interim dividends since its debut on the stock markets in May 2022.

LIC share price

LIC shares have gained around 6% in one week and 3% in one month. The stock is however down over 2% so far in 2026 and 3% in one year. In the longer term, the shares of the state-run insurer have jumped more than 38% in three years.

The company currently has a market capitalisation of nearly Rs 5.29 lakh crore. The stock’s P/E ratio currently stands at 8.95.

LIC Q4 earnings snapshot

LIC on Thursday reported a consolidated net profit of Rs 23,467 crore for the fourth quarter of FY26, marking a 23% year-on-year (YoY) rise from the Rs 19,039 crore profit reported in the corresponding quarter of the previous financial year. The firm’s net premium income, meanwhile, rose 12% YoY to Rs 1.65 lakh crore for the quarter under review against Rs 1.48 lakh crore a year earlier.

For the financial year ended March 31, 2026, LIC reported a more than 5% rise in assets under management (AUM) to Rs 57.29 lakh crore, while net profit increased over 19% year-on-year to Rs 57,419 crore.

Also read: Wipro's Rs 15,000 crore share buyback at 23% premium: Should you buy before record date?

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