Life Insurance Corporation of India (LIC) has announced its first-ever bonus share issue since it was listed on the stock market, offering a 1:1 bonus to its shareholders.
In simple terms, investors will receive one additional share for every share they currently hold, at no extra cost. The decision was approved by LIC’s board and is being seen as a move to reward its large base of shareholders.
The company is yet to announce the record date, which will decide which shareholders are eligible for the bonus shares. Once issued, the total number of shares held by investors will double, although the overall value of their investment will remain the same at the start.
This is the first time LIC has announced a bonus issue since its listing, making it a significant step for the company. It reflects confidence in its financial strength and future growth prospects.
The move is also expected to make LIC’s stock more accessible. With more shares available in the market, trading activity could increase, and smaller investors may find it easier to buy the stock.
Bonus issues are generally seen as a positive signal by the market, as they show that a company is comfortable with its reserves and willing to reward shareholders. It can also improve investor sentiment and attract more participation over time.
While the bonus shares do not immediately increase the value of an investor’s holdings, they can benefit shareholders in the long run if the company continues to perform well.
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