This post on HDFC Life IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on HDFC Life IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to HDFC Life IPO or not.
Related Posts: HDFC Life IPO Review: Strong parentage and Trusted brand
|Subscription: HDFC Life IPO ( x times)|
|Total Applications at close= Application wise Subscription=|
HDFC Life IPO: Grey Market Premium etc.
07/11/17 Grey Market Premium Rs. 9-10, Kostak (Application rate)- Rs. 400
06/11/17 Grey Market Premium Rs. 13-15, Kostak (Application rate)- Rs. 400-600
Complete Anchor List
Anchor Investors (AIs) portion in the Public Issue of HDFC Standard Life Insurance Company Limited 80,068,600 equity shares have been subscribed today by 76 AIs at Rs. 290/- per equity share. The Anchor Investors include: ICICI PRUDENTIAL EQUITY INCOME, ICICI PRUDENTIAL LONG TERM EQUITY, TVF FUND LTD, KUWAIT INVESTMENT AUTHORITY FUND, EASTSPRING INVESTMENTS INDIA INFRASTRUCTURE OPEN, EASTSPRING INVESTMENTS INDIA CONSUMER EQUITY OPEN , EASTSPRING INVESTMENTS INDIA CONSUMER EQUITY OPEN, DRAGON PEACOCK INVESTMENTS, FIRST STATE ASIA OPPOTUNITIES FUND, MASTER TRUST BANK OF JAPAN, MOTILAL OSWAL FOCUSSED FUND etc.
Click here for Complete HDFC Life Anchor Investors List
Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on HDFC Life IPO .
Ashika Direct: “At the higher price band, the issue is valued at 4.2x as on 30th Sep, 2017 embedded value, which is at premium when considered with 3.9x and 3.6x embedded value for SBI Life and ICICI Prudential respectively. However, considering
robust VNB margins, lower operating expenses ratio and strong persistency ratio coupled with healthy premium growth, the premium valuations are justified. Considering low insurance penetration in India and improvement in share of financial savings in household savings, together with strong operational metrics for HDFC Life, we recommend to “SUBSCRIBE” the issue from long term investment perspective.”
Angel Broking: “HDFC Standard Life Insurance Co Ltd (HDFC Life) started as a JV between HDFC Ltd, India’s largest Housing Finance Company and Standard Life Aberdeen Plc. HDFC Life is the country’s third-largest private sector life insurance company with 16.5% share of total private sector premiums in FY2017. Based on the new business premium (NBP), it ranked second with a market share of 17.2%. It had robust NBP margin of 22% for FY2017 vis-à-vis 10-19% of peers. Outlook & Valuation: At the upper band of Rs. 290 the issue is valued at 4.2x of 2QFY2018 embedded value (EV) of Rs. 14,011cr, bit higher than close listed player SBI Life and ICICI Pru which is trading at 3.6x and 3.3x of 2QFY2018 EV respectively. However, we believe slight premium is justifiable, considering, consistent growth across premium categories, improving dividend payout over last 4 years, strong parentage, trusted brand name, highest VNB margin (22% for FY2017) and well balanced business mix. Based on the above positive factors we assign SUBSCRIBE rating to the issue.“
Capital Market: ” Score 55/100,The company is valued at Rs 58260 crore at the upper price band of Rs 290 per share. With embedded value (EV) at Rs 14010 crore end September 2017, the scrip is offered at 4.2 times the EV. Among the peers, ICICI Prudential Life Insurance Company currently trades at 3.4 times EV end September 2017. SBI Life Insurance is trading at 4 times EV end March 2017. However, ICICI Prudential and Bajaj Allianz computes EV using Indian EV principles set out in actuarial practice standard 10. SBI Life, Max Life and HDFC Standard Life compute EV using market consistent EV principle.”
Choice International: “On valuation front, HDFCSL is available at a P/IEV of 4.7x (to its FY17 IEV), which is aggressively priced as compared to the peers. Also considering the H1 FY18 IEV, the company is available at a P/IEV of 4.2x as compared to 3.4x of the peers. We are of the opinion that considering the revenue-mix, profitability, the higher contribution of new business to the IEV and higher & trusted presence of HDFC brand in the domestic consumers, the premium valuation demanded by the company is justified. Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue.”
GEPL Capital:“HDFC Standard Life Insurance Company Ltd (HDFC Life) stands to gain from operating leverage. At a P/BV of 15.1xs of FY17 book value we believe that HDFC Life gives a higher return on equity than its peers through its value added business model. We assign a Subscribe rating to the IPO. “
ICICIDirect: “At the IPO price band of | 275-290, the stock is available at P/IEV multiple, of 4.2x H1FY18 EV of |14010 crore (post issue) at the upper end of the price band. Factoring the parentage brand of ‘HDFC’, strong corporate governance and better than industry VNB margins along with high dividend payouts, we believe valuations are reasonable. We recommend that investors Apply to the issue. Post issue market capitalisation is at Rs. 58258 crore at the upper price band.”
KR Choksey: “At the upper price band of Rs. 290 per share, the company is valued at Rs. 580.8 bn which translates into a P/FY17 EV of 4.7x. In comparison to current valuations of SBI Life (3.9x FY17 EV) and ICICI Prudential Life (3.4x FY17 EV), the issue may look relatively expensive. However, taking into account the operating metrics of HDFC Life, especially the comparatively high share of protection business, high VNB margins, strong parentage and trusted brand, and long-term industry prospects, we believe a multiple of 4.7x P/FY17 EVis justified. Hence, we recommend to ‘SUBSCRIBE’ to the issue.”
Motilal Oswal: “Even though valuations look high compared with its listed peers , the premium valuation for the issue is justified given huge the potential for growth as insurance is highly under penetrated in India, while strong financial performance, focus on customer centricity enabling growth across business cycles, consistently growing multi-channel distribution footprint and strong return on equity (RoE) are other positives. The stock would be available at 4.2 times H1FY18 EV of Rs 14,010 crore (post issue). “Factoring in the parentage brand of HDFC, strong corporate governance and better than industry VNB margins along with high dividend payouts, we believe valuations are reasonable,”
Prabhudas Liladhar: “HDFC SL has the best VNB margins in the industry at 22% due to focused growth in highly profitable products. It’s IPO price of Rs275‐290 implies a valuation of 4.4x‐4.7x on Mar‐17 EV and at 2.6x‐2.8x on Sep‐19E EV which is fairly priced in our view given the healthy capital return ratios and good quality new business. We recommend “subscribe” for long term gains.”
Reliance Sec: “The company intends to continue expanding the number of its partnerships and diversifying its sources of new business premiums. It aims to stay ahead of the curve in forming alliances with a variety of distribution partners, including banks, non-banking financial companies, micro-finance institutions and other non-financial services companies. Given its strong financial performance and investments made over the years, the company is well-positioned to be a multi-channel\ distribution specialist and a preferred partner for distributors. Further, the company aims to continue to consolidate its position as a long-term player in the industry with its focus on better customer service, strong product propositions and steady profitability, which makes the offer a value play and a long term prospect..”
SP Tulsiyan website: “Marquee pedigree and superior product mix are key positives for the company. But lack of near-term triggers, premium valuations, company’s wisdom on listing gains, poor performance of recent insurance IPOs do not leave much room for immediate returns. One can look to invest only with a long term investment view. “