The country’s largest insurance company Life Insurance Corporation of India has given a big surprise for its investors. The company has announced to give 1:1 bonus shares, which means that people who have one share of LIC will get another share absolutely free. About 22 lakh shareholders will directly benefit from this decision. The special thing is that for the first time in its history, LIC has decided to give bonus shares, due to which a lot of enthusiasm is being seen among the investors.
Bonus shares means that the company gives additional shares to investors from its profits or reserves, without taking any money from them. LIC has clarified that only those investors who hold shares of the company till the record date will be entitled to this bonus. That means if you have 10 shares till that due date, you will get 10 more shares. This will double your total shares, although it will not have any impact on the total value of the company.
How is the company giving this bonus?
LIC is using its reserve funds for this bonus issue. The company said that it will issue these shares by capitalizing about Rs 6,325 crore out of its reserves and surplus of about Rs 1.5 lakh crore. This move shows that the financial position of the company is strong and it has the ability to give returns to investors.
When will I get the shares?
According to the company, after the approval of the board, the bonus shares will be deposited in the demat account of the investors within two months. It is estimated that this process can be completed by June 12. However, some necessary approvals are still pending for this and the record date will also be announced soon. By receiving bonus shares, the number of shares held by investors increases, which also increases the chances of future profits. Additionally, the share price usually adjusts down, making it easier for new investors to buy. This also increases the buying and selling of shares i.e. liquidity in the market.
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