LIC plans: The price of Life Insurance Corporation of India (LIC) shares has decreased by almost 35% over the past six months, and investors are less inclined to purchase the stock. However, according to Reuters, the company plans to give bonus shares and dividends of roughly Rs 1.8 lakh crore to the shareholders in order to restore the damaged stock that launched for Rs 949 per piece following its IPO.
The corporation hopes to win back investors’ trust with this. LIC shares decreased to Rs 593 per share on Friday. In May 2022, the stock was admitted to trading on markets. Since the listing, investors have lost almost Rs. 2.23 lakh crore as a result of a price decline of about 35%.
Dividends or bonus shares
A fund intended to distribute dividends or bonus shares will reportedly receive a transfer from policyholder funds to LIC of almost $22 billion, according to the report.
One-sixth of the 11.57 trillion rupees that the LIC owns in its non-participating fund is represented by the 1.8 trillion Indian rupee (about $22 billion) fund. Life insurance companies often offer two different sorts of products: participating and non-participating. Customers split earnings from participating policies with them, whilst subscribers receive a set return from non-participating insurance.
LIC’s net worth
The LIC has yet to request board clearance for the same, though. If the LIC receives the go-ahead and the money is transferred, that will increase the LIC’s net worth by nearly 18 times.
According to the Financial Express, the Ministry of Finance has encouraged LIC to modify or modernise its product line in order to increase profitability. This will aid the business in providing investors with better profits.
In the June quarter, LIC’s net profit increased dramatically from Rs 2.94 crore to Rs 682.88 crore.
