Overview
- LIC declared a 1:1 bonus issue that doubles outstanding shares, and on Friday, May 29 trading quotes were mechanically adjusted to roughly half their prior per-share levels, which made portfolios show an apparent near-50% fall.
- The halving of per-share quotes does not reduce shareholder wealth because total market capitalisation stays the same after the bonus is applied.
- LIC set June 1 as the deemed allotment date and June 2 for effective listing, so bonus shares will appear in demat accounts only after those formal steps and some trading apps may not show the credited units immediately.
- LIC reported a strong Q4 with a 23% year-on-year jump in net profit and a board-approved dividend equal to Rs 10 per new share, which translates to Rs 20 on a pre-bonus basis for eligible holders.
- Brokerages have adjusted target prices and ratings to reflect the bonus and liquidity change, and separate reports of a possible unconfirmed 2% government stake sale for up to about Rs 10,000 crore remain a developing item to watch.