Did LIC shares really crash 50% in one day? Here's how the bonus math works

Shares of Life Insurance Corporation of India (LIC) adjusted to the state-run insurer's first-ever bonus issue in a 1:1 ratio, appearing to have crashed nearly 50% in just one session on Friday.

Shares of the company opened at Rs 417.60 apiece on NSE on Friday, after closing at Rs 830 apiece on Wednesday. In reality, the stock declined around 1.5% to trade at Rs 411.45 apiece.

All about LIC's 1:1 bonus issue

LIC in April approved the plan to issue one fully paid-up equity share of Rs 10 each for every fully paid-up equity share of Rs 10 each held by every eligible shareholder as on the record date. The company said that it will issue the bonus shares by capitalising upDebaroti Adhikary to Rs 6,325 crore out of its reserves and surplus available as of December 31, 2025, which stood at nearly Rs 1.5 lakh crore. It had fixed May 29 (Friday) as the record date for its 1:1 bonus issue.

A bonus issue consists of free shares distributed by a company from its reserves and is often seen as a sign of strong financial health and growth prospects. While the issue of bonus shares increases the total number of outstanding shares, it does not change the company’s market capitalisation. However, it can improve liquidity and affordability, allowing more investors to add shares of the company to their portfolios.

This marks LIC’s first-ever bonus issue for its more than 21 lakh shareholders. The state-run insurance behemoth has so far announced five interim dividends since its debut on stock markets in May 2022.

Can you buy LIC shares today and be eligible for 1:1 bonus issue?

who own LIC shares

Since markets were closed on May 28 (Thursday) on account of Bakri Id, May 27 (Wednesday) was effectively the last date to buy the shares of LIC so that they are credited to the shareholders’ accounts by the record date (Friday), making them eligible for the bonus issue bonanza.

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Only those shareholders in their demat accounts as of Friday will be eligible to receive the bonus shares. Due to SEBI's T+1 settlement norm, investors must buy the company's shares at least one trading day before the record date to ensure they are credited to their demat accounts by that date and thus be eligible for the corporate action.