HDFC Standard Life IPO overall subscribed 4.90 times, retail quota undersubscribed

NEW DELHI: The initial public offer (IPO) of HDFC Standard Life Insurance Company was overall subscribed nearly five times on the last day of the bidding process on Thursday.

Data available with the NSE showed that the issue received bids for 107.61 crore shares, which is 4.90 times against 21.98 crore shares offered by the company.

The company had fixed price band of Rs 275-290 per share for the public offer.

The portion reserved for qualified institutional buyers (QIBs) got oversubscribed 16.67 times, non institutional investors 2.29 times and retail investors 0.92 times.

HDFC Standard Life Insurance Company on Monday had already garnered Rs 2,322 crore from anchor investors including Norwegian fund Norges, Kuwait Investment, T Rowe Price, Fidelity, Blackrock and JP Morgan and Singapore's sovereign wealth fund Temasek, at the higher end of the price band.

“We believe the company will be able to attract adequate investor interest on the basis of its robust fundamentals compared to peers and strong parentage. Given the mature valuations, investors can subscribe to the issue from a long term perspective. It must be noted that since the issue is being offered at expensive valuation, it may not attract major listing gains," Centrum Broking said in a note.

HDFC Standard Life Insurance started as a JV between HDFC and Standard Life Aberdeen Plc. HDFC and Standard Life held 61.53 per cent and 34.94 per cent, respectively, in HDFC Life in March. The Azim Premji Trust owns a 0.95 per cent stake and the remaining 2.58 per cent is held by other shareholders.

At present, it is the third-largest private sector life insurance company in India with 16.5 per cent share of total private sector premiums in FY2017.

At the upper end of the price band of Rs 290, the company would trade at 4.03 times P/EV against less than 2 times P/EV for regional peers.