Life Insurance Corporation of India (LIC) has announced a significant benefit for its shareholders: an effective double dividend payout of Rs 20 per share, following a 1:1 bonus share issue. This move means eligible investors will see their dividend amount double, reflecting the increased number of shares in their demat accounts.
Bonus Issue and Dividend Details
The state-run insurance giant declared a final dividend of Rs 10 per equity share for the financial year 2025-26. However, due to the concurrent 1:1 bonus share issue, shareholders eligible for the bonus will receive an additional Rs 10 dividend for each new share, bringing the total effective dividend to Rs 20 per share on a pre-bonus basis.
LIC shares traded ex-date for the bonus issue on Friday, May 29, 2026. The record date for determining eligibility for bonus equity shares was also fixed as May 29, 2026. Subsequently, the record date for the dividend payout has been set for Thursday, June 25, 2026. The final dividend recommendation is subject to shareholder approval at the company's fifth Annual General Meeting (AGM), scheduled for Monday, July 27, 2026.
Impact on Shareholders and Financial Performance
This development will significantly benefit both the Government of India, which holds nearly 96.50 percent of LIC's shares, and retail investors. The government is projected to receive approximately Rs 12,207.25 crore in dividends post-bonus share allotment. Similarly, over 21.11 lakh retail investors, who collectively owned 1.91 percent stake as of March 31, 2026, are expected to receive a total dividend of Rs 241.4 crore.
For the quarter ending March 31, 2026, LIC reported robust financial results. Net profit surged by 23 percent year-on-year to Rs 23,467 crore. Net premium income also saw a healthy increase of 12 percent year-on-year, reaching Rs 1.65 crore, while investment income grew by 17 percent year-on-year to Rs 1.09 lakh crore during the January-March 2026 period.
Market Reaction and Analyst Outlook
Despite the positive news on dividends and bonus shares, LIC's stock saw some fluctuations. On the ex-date for bonus shares, the stock adjusted to Rs 428.55, but subsequently dipped 4 percent to Rs 411.50, causing its market capitalization to fall below Rs 5.25 lakh crore. The shares have also declined over 16 percent from their 52-week high in June 2026 and are trading below their adjusted IPO price.
However, several brokerage firms maintain a positive outlook on LIC. Emkay Global and ICICI Securities have issued 'buy' ratings, with adjusted target prices of Rs 550 and Rs 615, respectively, citing strong VNB (Value of New Business) growth and attractive valuations. Systematix Institutional Equities also recommends a 'buy', setting an adjusted target price of Rs 485, noting the company's focus on higher ticket sizes and VNB growth.