India's LIC jumps most since listing after profit surge

Illustration shows Life Insurance Corporation of India (LIC) logo

BENGALURU (Reuters) -Shares of Life Insurance Corporation of India rose as much as 9.1% on Monday, their best intra-day percentage gain since listing, after the country's largest insurer reported a surge in quarterly profit on Friday.

LIC's profit after tax surged to 159.52 billion Indian rupees ($1.98 billion) in the July-September quarter, from 14.34 billion rupees a year earlier, boosted mainly by the transfer of nearly $1.8 billion from policy holders' fund to shareholders' fund.

The state-owned insurer, which listed on Indian stock exchanges in May, said it transferred 142.72 billion rupees from its non-participating fund to shareholders' fund.

Reuters had reported last month that the move was aimed to pay dividends or issue bonus shares to revive the battered stock, which has fallen 28% from its listing price as of last close.

However, Macquarie analysts said the profit surge does not change the embedded value "dynamics".

"Despite about 100 billion rupees value of new business increase in the past one year, the embedded value has been flat," Macquarie Research said.

LIC's embedded value -- a measure of future cash flows in life insurance companies and a key financial gauge for insurers -- stood at 5.44 trillion rupees as of Sept. 30 against 5.40 trillion rupees last year.

Net premium income rose more than 26% to 1.32 trillion rupees, the company said in an exchange filing. ($1 = 80.8000 Indian rupees)

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Savio D'Souza and Dhanya Ann Thoppil)