SBI Life Insurance IPO: Brokerage Views & Run up to the IPO

SBI Life insurance
This post on SBI Life Insurance 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 SBI Life Insurance 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 SBI Life Insurance IPO or not.

Related Posts:
  1.  SBI Life IPO Review
  2. SBI Life IPO: Comparison with ICICI Pru Life
SBI Life Insurance IPO: Grey Market Premium etc.

22/9/17  Grey Market Premium – NIL
21/9/17 Grey Market Premium Rs. 10-15 
19/9/17 Grey Market Premium Rs. 20-25 ,  Kostak (Application rate) –  Rs. 400-500

Subscription: SBI Life Insurance IPO  ( x times)
QIB NII Retail  Employees SBI Share holders Total
Day 3 12.56 0.7 0.85 1.03 .0.38 3.58
Day 2   1.58 0.08 0.37 0.45 0.11 0.58
Day 1  0.06 0.01 0.18 0.18 0.05  0.09
Complete Anchor List

SBI Life Insurance Company Limited  has finalized allotment of 31,800,000 equity shares  to a total of  69 AIs at Rs. 700/- per equity share. The Top ten  investors include Hdfc Mutual Fund 2( 7.64%), Canada Pension Plan Investment (7.05%),  Icici Prudential Mutual Fund ( 6.74%), 4 Government Of Singapore (4.90%), Aranda Investments Pte Ltd ( 4.38%), Pioneer Investment Fund (3.82%), Reliance Mutual Fund 3.82%, Birla Sun Life Mutual Fund  3.82%, Abu Dhabi Investment Authority – 3.32%, Fil Investments (3.32%) 
Click here for Complete SBI Life IPO Anchor List

Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on SBI Life Insurance IPO .

Ajcon Global: “We like the story of SBI Life is uniquely positioned as it is doing well in both the major channels: – agency distribution or individual agency where it is growing at around 20 percent which is double of the general industry growth in this channel and in bancassurance the potential that is available in State Bank Group is immense. At the upper end of the price band of Rs. 700, the IPO is valued at 74x at FY17 EPS on post IPO basis which we believe is at a huge premium to its immediate listed peer – ICICI Prudential. Owing to the premium pricing, we believe listing gains would be minimal.”

Angel Broking:
“We believe the Indian Life Insurance industry is in a phase of high growth and lower penetration will ensure the growth remaining higher for next couple of years. SBI Life with its strong brand name and wide distribution network is one of the best plays for Indian Life Insurance industry. At the upper price band of `700 the issue is offered at 4.2x its Embedded Value of `16,538cr, little higher than 3.8x for ICICI Prudential. We believe the premium valuation for SBI is justified due to its higher incremental market share gain, and hence we recommended investors to “SUBSCRIBE” to the issue with long term perspective. “

Asit C Mehta Investment: “At the upper price band, the asking price is at a P/EV (price/embedded value) of 4.1 times at FY17 EV of Rs16,538 crore, which is fairly priced, and the brokerage recommended a subscribe rating to the issue from a long-term perspective.”

Capital Market
: ” Score 50/100, The Embedded Value of the SBI Life stands at Rs 16538 crore end March 2017. The company is offered at valuation of Rs 70000 crore or 4.23 times of embedded value at the upper price band of Rs 700 per share. ICICI Prudential Life is currently trading at 3.78 times its March 2017 embedded value.”

Choice Broking ““At the higher price band of Rs. 661 per share, SLIC’s share is valued at a FY17 Price/Indian Embedded Value (P/IEV) multiple of 4.2x, which is at a premium to its only listed peer ICICI Prudential Life Insurance Company Ltd. (trading at a P/IEV of 3.8x. The demanded valuation is at a steep premium of around 54% to the Dec. 2016 transaction and the demanded P/IEV of 4.2x is too higher as compared to the trading range of 3.5-4.4x of ICICI Prudential Life Insurance Company Ltd. We feel that steep valuation has left limited room for price appreciation for the retail investors.Thus considering the above observations, we assign a “Subscribe with Caution” rating for the issue. We feel that that the investors can enter in this script at a lower price post listing and can hold it for a long period for better returns.”

Hem Securities: “Company is bringing the issue at p/e multiple of 55-56 on post issue Q1FY18 annualized eps of Rs 12.54. At upper band, co is trading at P/EV multiple of 4.23x which is slightly higher .Although co has enjoyed superior growth but looking after valuation, we recommend “Subscribe” on issue for long term.”

Indiainfoline: “SBI Life is well positioned to capitalize on any opportunity given significant scope for penetration within bancassurance network (mammoth base of SBI, SIB and PSB combined), planned investment in individual agency channel and emphasis on digital platform. Not to forget, the company has a strong brand pull also.”  

Prabhudas Liladhar:”At the upper end of the band at Rs700 SBI Life trades at 4.2x FY17 P/EV of Rs165 bn which we believe is fully valued. Market leadership, favourable demographics, increased awareness towards insurance and healthy return ratios makes the issue attractive from a medium to long term perspective. We recommend investors to subscribe to the issue”

SMC: “Considering the valuation at upper price band of Rs. 700, EPS and P/E of FY2017 are Rs. 9.55 and 73.33 multiple respectively and at a lower price band of Rs. 685, P/E multiple is 71.75; at upper price band of Rs. 685 , book value and P/B of FY2017 are Rs. 58.79 and 11.91 multiple respectively and at a lower price band of Rs. 685, P/B multiple is 11.65. No change in pre and post issue EPS and Book Value as the company is not making fresh issue of capital.”

SPA Securities Ltd : “CRISIL Research forecasts new business premium for life insurers to grow at 11-13% CAGR from fiscals 2017 to 2022, compared with 9% CAGR between fiscals 2012 and 2017. CRISIL Research expects total premium to grow at 13-15% CAGR over the next five years, from INR 4.2 tn in FY17 to INR 8tn by FY22. Improving economic growth, low inflation, and increase in financial savings, along with rising awareness of insurance, would be the key catalysts. The issue at INR 700 per share is expensively priced at 4.2x P / EV and 73.3 P/E FY17 earnings as against its peers. However, taking into account that SBI Life is largest player in the private space and has strong multi-channel distribution and strong focus on customer service standards, we recommend SUBSCRIBE for long term.”

SP Tulsiyan Website: “Marquee pedigree, unparalleled distribution reach, superior product mix and healthy growth make the company a worthy investment stock. Secondary markets being close to all-time highs and huge appetite for quality BFSI stocks, despite not-the-most-attractive issue price, the issue is a subscribe, to be held over the long term, just as any life insurance policy”

Ventura Securities: “At Rs. 700 per share, which marks the higher end of the price band, the company is valued at a PE multiple of 73.7 times its FY17 earnings. Considering the likely increase in earnings and eventually the net worth, the pricing appears to be attractive. The huge opportunity and penetration levels in life insurance provide ample scope for SBI Life to grow its portfolio at a rapid pace. We believe SBI Life has the potential to post robust numbers in the years to come. “

(To be updated soon with more brokerage recommendations”

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk. 

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