Shares of Life Insurance Corporation of India Ltd. rose during early trade on Wednesday after the board approved a maiden bonus issue.
The shares, which carry a face value of Rs 10, are being issued in a 1:1 ratio, effectively doubling its paid-up share capital. Under this structure, shareholders receive one new bonus equity share for every one existing share held. This is the first-ever bonus issue announced by LIC.
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The company will issue free bonus shares within two months from the date of approval, which is on or before June 12. However, the proposal is subject to approval from the shareholders and will be done in accordance with the applicable provisions.
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"Since listing in May 2022, LIC has been paying dividends consistently and also increasing the dividend per share over a period of time from Rs 1.50 per share to Rs 12 per share. We have been continuously evaluating various mechanisms for rewarding our shareholders and we believe this proposed bonus issue is a significant step taken by us in that direction," said CEO and MD R Doraiswamy.
LIC Share Price Movement
LIC share price jumped as much as 4.24% on the NSE to Rs 837.75, compared to a 1.5% gain in the benchmark Nifty 50 index. The total traded turnover was Rs 129 crore. The relative strength index was near 50. The scrip is up 6.4% in the last 12 months and down 2.3% year-to-date.
Twenty-two out of 26 analysts tracking LIC have a 'Buy' rating on the stock, three recommend a 'hold' and one suggests a 'sell'. The average of 12-month price targets is Rs 1,031 and indicates a potential upside of 24%.
ALSO READ: LIC Approves 1:1 Bonus Shares: Check Issue Size, Timeline And Other Details
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