Ashika Stock Broking Limited Ashika Research - Equities 1 IPO Note: HDFC Standard Life Insurance Company Ltd. Issue Snapshot Company Name HDFC Standard Life Insurance Company Ltd. Issue Opens November 07, 2017 to November 09, 2017 Price Band Rs. 275 to Rs. 290 Bid Lot 50 Equity Shares and in multiples thereof. The Offer Public issue of 299,827,818 Equity shares of Face value Rs.10 each, (Comprising of Offer for Sale by Selling Shareholder (HDFC Ltd.: 191,246,050 Equity Shares and Standard Life: 108,581,768 Equity Shares). Issue Size Rs. 8246.26 – 8695.01 Crore IPO Process 100% Book Building Face Value Rs. 10.00 Exchanges NSE & BSE BRLM Morgan Stanley India Company Private Limited, HDFC Bank Limited, Credit Suisse Securities (India) Private Limited, CLSA India Private Limited, Nomura Financial Advisory and Securities (India) Private Limited, Edelweiss Financial Services Limited, Haitong Securities India Private Limited, IDFC Bank Limited, IIFL Holdings Limited and UBS Securities India Private Limited Registrar Karvy Computershare Private Limited Industry: Life Insurance Recommendation: Subscribe Date: November 06, 2017 1008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 – 6611 1700, Extn. - 704 www.ashikagroup.com Objects of the Offer Offer for Sale The Company will not receive any proceeds of the Offer for Sale by the Selling Shareholder. The objects of the Offer are to achieve the benefits of listing the Equity Shares of the Company on the Stock Exchanges. The listing of Equity Shares will enhance the “HDFC Life” brand name and provide liquidity to the existing Shareholders. Issue Break up Issue Size Allocation Equity Shares* QIB ex Anchor 20% 53,379,103 Anchor Investor 30% 80,068,655 HNI 15% 40,034,328 RII 35% 93,413,431 Total Public 100% 266,895,517 Employee Reservation 2,949,520 HDFC Shareholders 29,982,781 Total 299,827,818 Company Highlights HDFC Standard Life Insurance Company Limited, is among the top five private life insurers in India (measured on total new business premium) in FY16 and FY17and also one of the most profitable life insurers in India (based on Value of New Business (VNB) margin), , according to CRISIL. Besides consistently being among the top three private life insurers in terms of profitability based on VNB margin, the Company has also consistently been among the top three private life insurers in terms of market share based on total new business premium between FY15 and FY17, according to CRISIL. The company has a healthy balance sheet with total net worth of Rs. 41.5 billion and a solvency ratio of 200.5% as at September 30, 2017, above the minimum 150.0% solvency ratio required under IRDAI regulations. HDFC Standard Life insurance generated Profit After Tax of Rs. 8,869.2 million and delivered a Return on Equity of 25.6%, Return on Invested Capital of 40.7% and Operating Return on Embedded Value of 21.7% during FY17. As at September 30, 2017, it had total AUM of Rs. 995.3 billion and Indian Embedded Value of Rs. 140.1 billion. VNB Margin for H1 FY18 was recorded at 22.44% and for FY17 at 22.02%. Equity Share Pre Issue (Nos. Cr.) 200.9 Fresh Share (Nos. Cr.) 0.0 OFS Share (Nos. Cr.) 30.0 Equity Share Post Issue (Nos. Cr.) 200.9 Market Cap (Rs. Cr.)* 58,260.2 Dilution 14.9% Fresh 0% OFS 14.9% * Based on Higher Price Band @ 290
6
Embed
HDFC Standard Life Insurance Company Ltd. Standard Life Insuran… · Broking Limited Ashika Research - Equities 1 IPO Note: HDFC Standard Life Insurance Company Ltd. Issue Snapshot
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Ash
ika
Stoc
k B
roki
ng L
imit
edAshika Research - Equities
1
IPO Note: HDFC Standard Life Insurance Company Ltd.
Issue Snapshot
CompanyName
HDFC Standard Life Insurance Company Ltd.
Issue Opens November 07, 2017 to November 09, 2017
Price Band Rs. 275 to Rs. 290
Bid Lot 50 Equity Shares and in multiples thereof.
The Offer
Public issue of 299,827,818 Equity shares of Face value
Rs.10 each, (Comprising of Offer for Sale by Selling
Shareholder (HDFC Ltd.: 191,246,050 Equity Shares and
Standard Life: 108,581,768 Equity Shares).
Issue Size Rs. 8246.26 – 8695.01 Crore
IPO Process 100% Book Building
Face Value Rs. 10.00
Exchanges NSE & BSE
BRLM
Morgan Stanley India Company Private Limited, HDFC Bank
Single premiums 1,297.0 1,645.3 2,513.3 3,082.5 4,964.0 2,602.4
Total Premium 11,502.2 12,062.9 14,829.9 16,313.0 19,445.5 9,140.3
Source: RHP
Comparison with listed industry peers
Name of the companyEPS(Rs.)
NAV(Rs.)
P/E(x)
P/B(x)
RoNW(%)
Market Cap(Rs. Cr.)
HDFC Life 4.4 19.1 65.9 15.2 25.6 58,260
SBI Life 9.6 55.5 67.1 11.6 18.6 64,390
ICICI Pru 11.7 44.6 34.2 9.0 28.7 57,469
Source: RHP, Ashika ResearchNote: HDFC Life fig. are calculated based on higher price band. All Fig. are of FY17
Ash
ika
Stoc
k B
roki
ng L
imit
edAshika Research - Equities
51008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 – 6611 1700, Extn. - 704 www.ashikagroup.com
(In Rs. Mn.) FY15 FY16 FY17 Q1FY18
Key Performance Indicators
Total premium 148,299 163,130 194,455 91,403
Net premium 65,752 80,572 94,825 35,752
AUM 670,467 742,472 917,424 995,340
New business sum assured 1,815,761 2,714,860 3,887,575 1,965,449
Embedded value 88,882 102,325 124,705 140,114
VNB 5,915 7,393 9,225 4,782
VNB margin 18.5% 19.9% 22.0% 22.4%
EVOP 16,012 18,372 22,193 12,576
APE* 31,946 37,095 41,882 21,307
Total operating cost ratio 10.2% 11.6% 12.7% 14.2%
13th month persistency 73.3% 78.9% 80.9% 82.2%
61st month persistency 39.8% 50.0% 56.8% 55.4%
Operating Return on Embedded Value 22.9% 20.7% 21.7% 21.2%
Insurance profits 6,242 6,803 7,510 4,484
Profits after tax 7,855 8,168 8,869 5,541
Insurance profit as % of total profit after tax 79.5% 83.3% 84.7% 80.9%
Solvency ratio 196.1% 198.4% 191.6% 200.5%
Return on Net worth 35.2% 28.9% 25.6% 13.4%
Net Asset Value Per share (Rs.) 12.7 15.6 19.1 22.3
Number of lives insured (in millions) 5.7 15.4 20.9 11.7
Persistency Ratio
13th Month 73.3% 78.9% 80.9% 82.2%
25th Month 64.0% 67.5% 73.3% 74.4%
37th Month 65.1% 60.1% 63.9% 65.6%
49th Month 64.2% 63.4% 58.3% 59.3%
61st Month 39.8% 50.0% 56.8% 55.4%
Source: RHP
Ash
ika
Stoc
k B
roki
ng L
imit
edAshika Research - Equities
61008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 – 6611 1700, Extn. - 704 www.ashikagroup.com
Ashika Stock Broking Limited (“ASBL”) or Research Entity has started its journey in the year 1994 and is engaged in the business of broking services,
depository services, distributor of financial products (Mutual fund, IPO & Bonds). This research report has been prepared and distributed by ASBL in the
sole capacity of a Research Analyst (Reg No. INH000000206) of SEBI (Research Analyst) Regulations 2014. ASBL is a wholly owned subsidiary of Ashika
Global Securities (P) Ltd., a RBI registered non-deposit taking NBFC Company. Ashika group (details is enumerated on our website
www.ashikagroup.com) is an integrated financial service provider inter alia engaged in the business of Investment Banking, Corporate Lending,
Commodity Broking, Debt Syndication & Other Advisory Services.
There were no significant and material disciplinary actions against ASBL taken by any regulatory authority during last three years.
Disclosure
ASBL or its associates, its Research Analysts (including their relatives) may have financial interest in the subject company(ies). However, the said
financial interest is not limited to having an open stock market position in /acting as advisor to /having a loan transaction with the subject company(ies)
apart from registration as clients.
1) ASBL or its Research Analysts (including their relatives) do not have any actual / beneficial ownership of 1% or more of securities of the subject
company(ies) at the end of the month immediately preceding the date of publication of this report or date of the public appearance. However
ASBL's associates may have actual / beneficial ownership of 1% or more of securities of the subject company(ies).
2) ASBL or their Research Analysts (including their relatives) do not have any other material conflict of interest at the time of publication of this
research report or date of the public appearance. However ASBL's associates might have an actual / potential conflict of interest (other than
ownership).
3) ASBL or its associates may have received compensation for investment banking, merchant banking, and brokerage services and for other products
and services from the subject companies during the preceding 12 months. However, ASBL or its associates or its Research analysts (forming part
of Research Desk) have not received any compensation or other benefits from the subject companies or third parties in connection with the
research report. Moreover, Research Analysts have not received any compensation from the companies mentioned herein in the past twelve
months.
4) ASBL or their Research Analysts have not managed or co–managed public offering of securities for the subject company(ies) in the past twelve
months. However ASBL's associates may have managed or co–managed public offering of securities for the subject company(ies) in the past
twelve months.
5) Research Analysts have not served as an officer, director or employee of the companies mentioned in the report.
6) Neither ASBL nor its Research Analysts have been engaged in market making activity for the companies mentioned in the report.
Disclaimer
The research recommendation and information herein are solely for the personal information of the authorized recipient and does not construe to be
an offer documents or any investment, legal or taxation advice or solicitation of any action based upon it. This report is not for public distribution or use
by any person or entity, where such distribution, publication, availability or use would be contrary to law, regulation or subject to any registration or
licensing requirement. We will not treat recipients as customer by virtue of their receiving this report. The report is based upon the information
obtained from public sources that we consider reliable, but we do not guarantee its accuracy or completeness. ASBL shall not be in anyways responsible
for any loss or damage that may arise to any such person from any inadvertent error in the information contained in this report. The recipients of this
report should rely on their own investigations.
Name Designation Email ID Contact No.
Paras Bothra President Equity Research [email protected] +91 22 6611 1704