HDFC Life Insurance shares jump after huge block deal
Premium- Shares of HDFC Life Insurance Company surged 2% on the BSE to ₹606 in Tuesday's early deals
Shares of HDFC Life Insurance Company surged 2% on the BSE to ₹606 in Tuesday's early deals after the UK-based investment company Abrdn said it is planning to sell 4.3 crore shares in the private sector insurer through block deal, reported PTI.
Abrdn is planning to sell up to 4.3 crore shares representing 2% of HDFC Life's outstanding shares through a block deal to raise over ₹2,425 crore. Reuters also reported on Tuesday that British asset manager Abrdn plc would sell a stake in HDFC Life through a block trade on Tuesday.
The Edinburgh-based company, which was formerly known as Standard Life Aberdeen, has offered the shares in the price band of ₹564.1-578.55, which is a discount of up to 2.5% on the scrip's close on Monday in the block deal.
The shareholding of Abrdn, one of the promoters of the insurer, will fall to 1.7 per cent after the trade is executed from the present 3.7%, as per the term sheet. Mortgage major HDFC, the other promoter in the private sector insurer, will continue to hold 48.7% of the company. Bofa Securities is the sole bookrunner for the sale of shares.
HDFC Life reported 21% rise in net profit at ₹365 crore for the first quarter ended June buoyed by topline growth along with higher renewal ratio that boosted margins. Its total premium rose 23% to ₹9,396 crore from ₹7,656 crore a year ago. New business margin grew to 26.8% from 26.2% on the back of profitable product mix and growth in protection business.
Consequent to acquisition of Exide Life Insurance in January 2022 for which it has received NCLT approval, it has become a wholly-owned subsidiary of the company and the deal added ₹20,000 crore to the AUM, taking the consolidated assets under management to over ₹2.5 lakh crore, including the ₹30,000 crore funds of its pension subsidiary.
HDFC Life Insurance shares have underperformed as the stock is down over 9% in 2022 (YTD) so far as compared to more than 2% rise in benchmark Sensex during the period.
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(With inputs from PTI)
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