Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
IPO News

| More

SBI Life Insurance Co Ltd - IPO Note - Angel Broking

Posted On: 2017-09-20 10:30:07

Strong parent backing leaves no scope for doubts

SBI Life Insurance is a JV between State Bank of India (SBI-70%), and BNP Paribas Cardiff (26%). The insurer's new business premium grew 35% from FY15 to FY17; it has a leadership position with 20% market share in New Business Premium (NBP) in FY17.

Strong premium growth has resulted consistent market share gain: SBI Life has been reporting strong growth in NBP, with 38.9% growth in FY2017 and 3 year CAGR of 28.3% v/s. industry growth rate of 26.2% and 13.5% respectively. Over FY2014-17, SBI Life has improved its market share by ~300bps to 20% (FY2017). Among the Private Insurers, SBI holds the leadership position, followed by HDFC Life - 17.2%, ICICI Pru - 15.5% and retained No. 1 position since last 8 years in NBP.

Widest distribution network backed by parent has ensured healthy AUM growth: SBI Life's parent i.e. SBI has a mammoth network of ~24,000 branches, which has helped it in garnering new business on a continuous basis. This has been instrumental in the strong AUM growth up 17.1% over FY2015-17 v/s. ICICI Pru's 10.7% and HDFC Life's 16.9% over the same period. Low miss-selling, high claim settlement and low surrender ratios will continue to drive the business of the company and we expect high double digit growth to sustain for multiple years going ahead.

Diversified product portfolio, high solvency & persistency makes SBI Life's business more predictable: SBI life has a well balanced portfolio (ULIP - 50.5%, Non participating - 34.7% and Participating - 15.4%) and is well capitalised with a solvency ratio of 211% (mandatory - 150%). This will ensure growth without dilution in the coming years, boosting the RoE from current level of 17%. Further, 13/37/61 month persistency ratio is the best among Private Players (SBI - 81.1/67.4/67.2, ICICI Pru - 85.7/66.8/56.2 & HDFC Life - 80.9/63.90/56.8). This reflects in the lowest surrender ratio of 22.8% among the private players (ICICI Pru - 52.8% and HDFC Life 31.3% for FY2017).

Outlook & Valuation: 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.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

IndoStar Capital Finance Ltd - IPO Note - Angel Broking

IndoStar Capital Finance Limited Offer opens on May 9, 2018

IPO Note - SoftTech Engineers Ltd - Arihant Capital Markets Ltd

Hindustan Aeronautics Ltd to list on March 28, 2018

Expectations high on listing of Bandhan Bank shares tomorrow

Mishra Dhatu Nigam Limited IPO receives subscription of 1.21 times

Lemon Tree Hotels Limited - IPO Note - Angel Broking

Mishra Dhatu Nigam Ltd - IPO Note - Sushil Finance

ICICI Securities Ltd - IPO Note - Sushil Finance

Lemon Tree Hotels Ltd - IPO Note - Sushil Finance

Mishra Dhatu Nigam Ltd - IPO Note - Angel Broking

Mishra Dhatu Nigam Ltd - IPO Note - Avoid - Hem Securities

ICICI Securities Ltd - IPO Note - SSJ Finance & Securities

Mishra Dhatu Nigam Ltd - IPO Note - Subscribe - SSJ Finance & Securities

IPO Note: MISHRA DHATU NIGAM LTD - NOT RATED - Kotak

IPO Note: ICICI Securities Ltd - SUBSCRIBE - Kotak

IPO: Mishra Dhatu Nigam Ltd - IIFL

Sandhar Technologies Limited - IPO Note - Angel Broking

Hindustan Aeronautics LTD - IPO Note - HEM Securities

ICICI Securities IPO to open for subscription on Mar 22, 2018

IPO Note: Sandhar Technologies Ltd - SUBSCRIBE - Kotak

IPO Note: Hindustan Aeronautics Ltd - SUBSCRIBE - Kotak

Bandhan Bank Ltd - IPO Note - Subscribe - HEM Securities

HDFC Asset Management Company Ltd files DRHP for IPO

Bandhan Bank Ltd - IPO Note - Subscribe - SSJ Finance

Bandhan Bank Limited - IPO Note - Angel Broking

IPO of ICICI Securities Ltd to open on March 22, 2018

Bharat Dynamics Ltd - IPO Note - SUBSCRIBE - Kotak

Bharat Dynamics Ltd - SUBSCRIBE - IPO Report - HEM SECURITIES

Bandhan Bank Ltd - IPO NOTE - Arihant Capital Markets

Bharat Dynamics Ltd - SUBSCRIBE - IPO Note - SSJ Finance

Bharat Dynamics Ltd - IPO Note - Angel Broking

Sarveshwar Foods Limited - IPO NOTE - Arihant Capital Markets

H.G. Infra Engineering Ltd - AVOID - IPO Update - SSJ Finance

HG Infra Engineering - IPO Note - Angel Broking

IPO Note - Aster DM Healthcare Ltd - Avoid - By SSJ Finance & Securities

Galaxy Surfactants Ltd - IPO Note - SUBSCRIBE - SSJ Finance & Securities

Shalby Limited - IPO Note - Angel Broking

Future Supply Chain Solutions Ltd - IPO Note - Angel Broking

HDFC Asset Management Company Limited to file for IPO

Reliance General Insurance receives final observations from SEBI for IPO

Srei Equipment Finance Ltd files DRHP for IPO

Future Supply Chain Solutions Ltd IPO to open for subscription on Dec 6, 2017

New India Assurance Co Ltd - IPO Note - CSEC Research

Khadim India Ltd - IPO Note - Angel Broking

The New India Assurance Company Ltd - IPO Note - Angel Broking

Mahindra Logistics Limited - IPO Note - Angel Broking

IPO of The New India Assurance Company Ltd. opens on November 01, 2017

Reliance Nippon Life Asset Management Ltd - IPO Note - Angel Broking

Srei Equipment Finance Ltd approves IPO



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018