LIC Share Price Falls 50% After 1:1 Bonus Issue Record Date

Life Insurance Corporation of India share price (NSE: LIC) appeared to crash nearly 50% on Friday, May 29, after the stock turned ex-record for its 1:1 bonus issue. 

The stock touched an intraday low of around ₹413 on the NSE compared to its previous close of ₹830. However, investors should note that this sharp decline does not reflect a real loss in value. 

Why Did LIC Share Price Fall? 

The decline happened because LIC turned ex-bonus for its 1:1 bonus issue. 

Under a 1:1 bonus issue, shareholders receive 1 additional share for every 1 share they already own. As the total number of shares doubles, the share price gets adjusted proportionately on the ex-bonus date. 

This means the stock price was automatically adjusted from around ₹830 to nearly ₹415 to reflect the increased number of shares in circulation. 

So, while the stock price looked like it had fallen 50%, the overall value of investors’ holdings remained largely unchanged. 

Are Investors Losing Money? 

No, investors are not losing money because of this price adjustment. 

For example, if an investor earlier held 1 LIC share worth ₹830, they will now hold 2 shares worth around ₹415 each after the bonus adjustment. The total investment value remains almost the same. 

On an adjusted basis, LIC stock was actually trading marginally lower by about 0.36%. 

Read More: BSNL Revenue Rises to ₹25,000 Crore in 2 Years as Network Upgrades Improve Operations! 

Who Is Eligible for the Bonus Shares? 

To receive the bonus shares, investors needed to buy LIC shares before the record date. 

Since the Indian stock market follows a T+1 settlement cycle, the last day to purchase LIC shares for bonus eligibility was Wednesday, 27 May, especially as Thursday was a market holiday. 

Investors buying the stock on or after the ex-bonus date will not qualify for the bonus shares. 

Quarterly Performance by LIC 

LIC recently reported its strongest quarterly earnings since listing. 

For the March quarter, the insurer posted a standalone net profit of ₹23,420 crore, up 23.2% year-on-year. For the full FY26 financial year, profit after tax rose 19.25% to ₹57,419 crore. 

The company also reported strong growth in its premium business. Annualised Premium Equivalent (APE) rose around 22% in Q4, driven by growth in both group and individual businesses. 

LIC’s Value of New Business (VNB) jumped 66.7% to ₹5,891 crore during the quarter, while its VNB margin for FY26 improved to 21.2%. 

Conclusion 

LIC’s apparent 50% share price crash was simply the result of a technical adjustment after its 1:1 bonus issue and not a sign of weakness in the company. 

Investors continue to focus on LIC’s strong financial performance and the government’s potential OFS plans, which could influence the stock in the coming months. 

Investors looking to explore dividend-paying stocks and investment opportunities can open a demat account to invest and trade in the equity market seamlessly. 

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