LIC Share Price Halves on Bonus Record Date, Real Decline Just 1.5%

By Huzaifa Zahoor

May 30, 2026

09:41 AM

3 min read

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Key Points

LIC share price fell from ₹830 to ₹412 on May 29 due to 1:1 bonus adjustment.

Actual stock decline was just 1.5%, not 50% as screens showed.

Shareholders received one free share for every share held on record date.

Company capitalized ₹6,325 crore from reserves to fund the bonus.

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Life Insurance Corporation of India’s LIC.BO share price fell from ₹830 to ₹412 on May 29, appearing to crash 50% in one day. The sharp decline reflects the company’s first-ever 1:1 bonus issue, not a real loss of value. On an adjusted basis, the stock actually fell just 1.5%. Every shareholder holding LIC shares on the record date received one free share for every share they owned.

Why the Price Dropped in Half

LIC turned ex-bonus on May 29 after closing at ₹830 on May 27. The stock opened at ₹417.60 and fell to ₹411.45 intraday. Under a 1:1 bonus issue, shareholders receive one additional share for every share held. As the total number of shares doubled, the share price was automatically adjusted downward by 50% to reflect the increased share count in circulation.

Your Portfolio Value Stayed the Same

An investor holding 10 LIC shares worth ₹8,551.50 before the bonus now holds 20 shares worth ₹8,551.50 after the adjustment. The number of shares doubled while the price per share halved. Total investment value remained unchanged. On an adjusted basis, LIC stock traded marginally lower by about 0.36%.

Who Got the Free Shares

Only investors who held LIC shares in their demat accounts by May 29 received the bonus. The Indian stock market follows a T+1 settlement cycle, so the last day to buy for bonus eligibility was May 27. Investors buying on or after May 29 did not qualify. LIC capitalized ₹6,325 crore from its reserves and surplus to fund the bonus.

Strong Earnings Behind the Bonus

LIC reported its strongest quarterly earnings since listing in May 2022. For the March quarter, the insurer posted a net profit of ₹23,467 crore, up 23% year-on-year. Full-year FY26 net profit reached ₹57,453 crore, up 19% from ₹48,320 crore in FY25. The bonus issue signals strong financial health and rewards shareholders with free equity.

Final Thoughts

LIC’s 50% price drop on May 29 was purely technical due to the 1:1 bonus adjustment. Actual decline was 1.5%. Shareholders who held before the record date received free shares and saw no loss in portfolio value.

FAQs

Did I lose money when LIC shares fell 50%?

No. The 50% fall was a technical adjustment for the 1:1 bonus issue. Your portfolio value remained unchanged as you received one free share per share held.

What is a 1:1 bonus issue?

A bonus issue distributes free shares from company reserves to shareholders. In a 1:1 ratio, you receive one new share per existing share, doubling your count while halving the price.

When did I need to buy LIC shares to get the bonus?

You needed to hold LIC shares by May 29, the record date. Due to T+1 settlement, the last purchase date was May 27. Later purchases did not qualify.

Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.

About Author

Huzaifa Zahoor

Co Founder

Huzaifa Zahoor is the engineer who built Meyka. He has spent years writing Python, training AI models, and building data pipelines specifically for financial markets. His technical articles have reached over 30,000 readers on Medium, so he knows how to make complex things easy to follow. If this article touches on how the tools work, he is the person who actually built them.