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HDFC Standard Life IPO / Review Recommendation

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resh:
Here are all the Brokerage Reviews of HDFC Standard Life IPO

Rohit Verma of Adroit Research said,

At the upper band of Rs 290, the issue is valued at 4.2x of 2QFY-2018 embedded value (EV) of Rs 14,011 Cr, a bit higher than close listed player SBI Life and ICICI Prudential which is trading at 3.6x and 3.3x of 2QFY-2018 EV respectively. However, we believe the slight premium is justifiable, considering, consistent growth across premium categories, improving dividend payout over last 4 years, strong parentage, trusted brand name, highest VNB (Value of New Business) margin (22% for FY2017) and well-balanced business mix. Based on the above factors we are very positive for long term but company is asking higher price band which is higher than its peers, so we suggest being on neutral side.

Aditya Birla Money has the following Review,

We believe HDFC Life has the significant potential to deliver steady growth from long term perspective after considering the expected improvement in India’s economic growth, financialisation of savings and under-penetrated Insurance market. Management has showcased its ability to deliver steady growth across all the business and economic cycles in the past. The company has a healthy balance sheet and delivered a RoE of 25.6%. As at June 30, 2017, it had a solvency ratio of 197.5%, above the minimum 150% solvency ratio required under IRDAI regulations. At the price band of ` 275-290, the company has priced the stock valuation at 4.7x FY17 Embedded value at higher end. Considering the parentage brand of ‘HDFC’, strong corporate governance, ability to consistently deliver steady PAT performance, better than industry VNB margins and high dividend payouts, we believe valuations of HDFC Life are reasonable. We recommend investors to SUBSCRIBE the issue from both short and long term perspective.

Shreesh Chandra of Nirmal Bang Securities Ltd said,

Besides consistently being among the Top 3 private life insurers in terms of profitability based on Value of New Business or VNB margin, it has also been consistently among the Top 3 private life insurers in terms of market share based on total new business premiums collected between FY15 and FY17, according to rating agency Crisil.

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