What's behind LIC shares' surge: Stock up 6% in two sessions ahead of bonus issue
The stock upmove comes ahead of LIC's bonus share issue. In a regulatory filing, LIC said its board approved the issuance of bonus equity shares in the ratio of 1:1.
- May 25, 2026,
- Updated May 25, 2026 12:42 PM IST
Shares of Life Insurance Corporation of India (LIC) extended gains for the second straight session on Monday, rising 4.03 per cent to hit a day high of Rs 846.10. With this, the PSU insurer's stock has climbed 5.67 per cent in two trading days.
The recent rally comes after LIC emerged as the highest profit-making company in India's financial sector for the March 2026 quarter (Q4 FY26), according to data compiled by ACE Equity.
Q4 earnings
JM Financial said LIC posted a strong operational performance during the quarter, aided by healthy growth in premium collections and improvement in margins.
The brokerage noted, "LIC reported strong results for Q4 FY26 – individual APE (Annualised Premium Equivalent) grew by 16 per cent, higher than reported RWRP (Retail Weighted Received Premium) growth of 13 per cent, and group APE rose by 37 per cent. Thus, total APE grew by 22 per cent. VNB (Value of New Business) margin of 21.2 per cent in FY26 implies a very strong 24.9 per cent margin in Q4. Margin expanded by 360bps YoY in FY26 led by ~3pps gain each from product mix and improved economic assumptions, and hit by 3pp from operating assumptions."
JM retained its 'Buy' rating on the stock and increased its target price.
"With a higher negative economic variance, EV at Rs 7.9 lakh crore (+2 per cent YoY) missed JMFe by 2 per cent and was below Sep'24 and Sep'25 levels. We raise our FY27/FY28E VNB estimates by 15 per cent+, with steady 10–12 per cent growth and improving margin (22 per cent by FY28E). We raise our TP to Rs 960 (from Rs 888 earlier), valuing the stock at 0.6x Mar'28 EVPS of Rs 1,647 (against Rs 1,596 earlier)," it added.
Meanwhile, HDFC Securities upgraded LIC shares to a 'Buy' rating while maintaining its target price at Rs 1,110.
LIC bonus issue; dividend
The stock upmove comes ahead of LIC's bonus share issue. In a regulatory filing, LIC said its board approved the issuance of bonus equity shares in the ratio of 1:1 by capitalising Rs 6,325 crore from reserves and surplus available as of December 31, 2025.
"...it is hereby informed that the Board of Directors of Life Insurance Corporation of India, at its meeting held on Monday, April 13, 2026, considered and approved the issuance of bonus equity shares in the ratio of 1:1, i.e. 1 fully paid-up equity share of Rs 10 each for every 1 fully paid-up equity share of Rs 10 each held by members of the Corporation as on the record date," LIC said.
The insurer has fixed May 29 as both the ex-date and record date to determine shareholders eligible for the bonus allotment.
LIC has also recommended a final dividend of Rs 10 per equity share of Rs 10 each (equivalent to Rs 20 per equity share on a pre-bonus basis) for FY26, subject to shareholders' approval. The company has fixed June 25, 2026, as the record date for the dividend.
Shares of Life Insurance Corporation of India (LIC) extended gains for the second straight session on Monday, rising 4.03 per cent to hit a day high of Rs 846.10. With this, the PSU insurer's stock has climbed 5.67 per cent in two trading days.
The recent rally comes after LIC emerged as the highest profit-making company in India's financial sector for the March 2026 quarter (Q4 FY26), according to data compiled by ACE Equity.
Q4 earnings
JM Financial said LIC posted a strong operational performance during the quarter, aided by healthy growth in premium collections and improvement in margins.
The brokerage noted, "LIC reported strong results for Q4 FY26 – individual APE (Annualised Premium Equivalent) grew by 16 per cent, higher than reported RWRP (Retail Weighted Received Premium) growth of 13 per cent, and group APE rose by 37 per cent. Thus, total APE grew by 22 per cent. VNB (Value of New Business) margin of 21.2 per cent in FY26 implies a very strong 24.9 per cent margin in Q4. Margin expanded by 360bps YoY in FY26 led by ~3pps gain each from product mix and improved economic assumptions, and hit by 3pp from operating assumptions."
JM retained its 'Buy' rating on the stock and increased its target price.
"With a higher negative economic variance, EV at Rs 7.9 lakh crore (+2 per cent YoY) missed JMFe by 2 per cent and was below Sep'24 and Sep'25 levels. We raise our FY27/FY28E VNB estimates by 15 per cent+, with steady 10–12 per cent growth and improving margin (22 per cent by FY28E). We raise our TP to Rs 960 (from Rs 888 earlier), valuing the stock at 0.6x Mar'28 EVPS of Rs 1,647 (against Rs 1,596 earlier)," it added.
Meanwhile, HDFC Securities upgraded LIC shares to a 'Buy' rating while maintaining its target price at Rs 1,110.
LIC bonus issue; dividend
The stock upmove comes ahead of LIC's bonus share issue. In a regulatory filing, LIC said its board approved the issuance of bonus equity shares in the ratio of 1:1 by capitalising Rs 6,325 crore from reserves and surplus available as of December 31, 2025.
"...it is hereby informed that the Board of Directors of Life Insurance Corporation of India, at its meeting held on Monday, April 13, 2026, considered and approved the issuance of bonus equity shares in the ratio of 1:1, i.e. 1 fully paid-up equity share of Rs 10 each for every 1 fully paid-up equity share of Rs 10 each held by members of the Corporation as on the record date," LIC said.
The insurer has fixed May 29 as both the ex-date and record date to determine shareholders eligible for the bonus allotment.
LIC has also recommended a final dividend of Rs 10 per equity share of Rs 10 each (equivalent to Rs 20 per equity share on a pre-bonus basis) for FY26, subject to shareholders' approval. The company has fixed June 25, 2026, as the record date for the dividend.