Shares of Life Insurance Corporation of India (LIC) experienced a notable rally, gaining nearly 6% over two trading sessions, closing Monday at Rs 846.10. The surge comes as the state-owned insurer gears up for a 1:1 bonus share issue and reported robust financial performance for the March 2026 quarter (Q4 FY26).
Bonus Shares and Dividend Drive Investor Enthusiasm
The primary catalyst for the recent stock upswing is the impending bonus share issuance. LIC's board approved a 1:1 bonus equity share ratio, meaning one fully paid-up equity share of Rs 10 for every one held. This decision, made on April 13, 2026, involves capitalising Rs 6,325 crore from the company's reserves and surplus as of December 31, 2025.
The insurer has set May 29, 2026, as both the ex-date and record date to determine shareholders eligible for this bonus allotment. Additionally, LIC has recommended a final dividend of Rs 10 per equity share (equivalent to Rs 20 on a pre-bonus basis) for FY26, pending shareholder approval. The record date for this dividend is fixed for June 25, 2026.
Stellar Q4 Performance Boosts Confidence
Beyond the bonus issue, LIC's impressive Q4 FY26 financial results have significantly contributed to investor confidence. According to data compiled by ACE Equity, LIC emerged as the highest profit-making company within India's financial sector for the quarter.
Brokerage firm JM Financial highlighted LIC's strong operational performance, citing healthy growth in premium collections and improved margins. The individual Annualised Premium Equivalent (APE) grew by 16%, while group APE rose by 37%, leading to a total APE growth of 22%. The Value of New Business (VNB) margin reached 21.2% for FY26, implying a robust 24.9% margin in Q4, driven by gains from product mix and improved economic assumptions.
Brokerages Upgrade Ratings and Targets
In response to these positive developments, several brokerages have revised their outlook on LIC shares.
- HDFC Securities upgraded LIC shares to a 'Buy' rating, maintaining its target price at Rs 1,110.
- JM Financial reiterated its 'Buy' rating and increased its target price to Rs 960 (from Rs 888 previously). The firm raised its FY27/FY28E VNB estimates by over 15%, anticipating steady 10-12% growth and an improving margin reaching 22% by FY28E.
These upgrades underscore analyst optimism regarding LIC's future growth trajectory and financial stability, further fueling the stock's upward momentum.