Mumbai: HDFC Standard Life Insurance Co. Ltd, India’s most profitable life insurer, on Tuesday joined the elite club of companies that have seen their market capitalization soar past Rs1 trillion on the exchanges.
At 9.40am, the HDFC Group firm saw its market capitalisation touch Rs1 trillion with its shares trading at a record high of Rs497, up 3.4% from its previous close, showed data from BSE.
The stock has gained over 71.3% since its listing, and so far this year, it has gained 23%. It listed on 16 November 2017 and its issue price was at Rs290 a share. The Rs8,695-crore IPO was subscribed over five times.
“It is set to benefit from domestic expansion and market-share gains due to its wide distribution network and innovative product suite. We expect a 24% CAGR in new premiums over FY17-20 and scope for margin expansion which will drive an 18% CAGR in embedded value. We believe the stock deserves a premium valuation to peers, given higher profitability,” said foreign brokerage firm CLSA in a 1 January note. The brokerage firm has rated the stock “buy” with a target price of Rs455 a share.
Of the analysts covering the stock, six have a “buy” rating, three have a “hold” rating, while four have a “sell” rating, shows Bloomberg data.
The company will hold its board meeting on 18 April to consider its March quarter earnings.
For the December quarter, the company reported a net profit of Rs207.32 crore, up 14.8% from Rs180.63 crore a year go same quarter. New business premium grew by 33% in the nine months ended December to Rs7,070 crore from Rs5,330 crore in the corresponding period a year ago. Its assets under management grew by 27%, faster than the average 20-24% in previous years.
The recently listed insurance companies have fared poorly since listing.
State-run life insurers General Insurance Corp. of India and New India Assurance Co. Ltd are trading at a discount. GIC Re listed on 25 October 2017, and has fallen 19% from its issue price ever since. On the listing day, it fell nearly 4.6%.
Similarly, New India Assurance currently trades nearly 12% lower from its issue price. The stock declined 9.4% on listing day, 13 November 2017. SBI Life Insurance Co. Ltd has declined 2.4% so far from its issue price; it listed on 29 September.
ICICI Prudential Life Insurance Co. Ltd, which listed in September 2016, had seen its shares fall 10.88% on debut. In 2017, the stock was up 27% from the issue price, and so far this year, it is trading flat. ICICI Lombard, which listed on 26 September 2017, has risen 20% from its issue price since listing so far.