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Headline : SBI Life Insurance ends at Rs 708, up 1% against its IPO price
News Date : Oct 03, 2017
Source : AIP News Burea
New India Assurance may hit the market after GIC Re in this month


SBI Life Insurance Company made a descent  debut by listing at Rs 735, a 5% premium against its initial public offer (IPO) price of Rs 700 per share on the National Stock Exchange (NSE).

However, it started retreating soon and declined to a low of Rs 701.70 by mid afternoon.

The stock  finally ended the day at Rs 708 on the BSE, 1% higher that issur price and down 3% from its open price.

It hit a high of Rs 740 and low of Rs 702 during the day. A combined 11.5 million shares exchanged hands on the NSE and BSE.

The SBI Life's Rs 8,400 crore IPO was subscribed 3.587 times. 

After IPOs of ICICI Lombard General Insurance and SBI Life, the capital markets will see yet another mega insurance IPO soon as GIC Re, country’s sole public sector reinsurer will launch its IPO soon. The reinsurer  that completed its road shows in international and domestic markets last week, is expected to  have an IPO of over Rs 10,000 crore.

Government sources point out that  within a gap of fortnight of GIC Re's issue, the country’s largest non-life genera insurer New India Assurance (NIA) will be also hitting the markets with its IPO that will be also around Rs 10,000 crore. Currently,the top team of NIA is busy in overseas road shows.   

However, both the IPOs of  the state owned  insurers would be moderately priced unlike the SBI Life and ICICI Lombard General Insurance that were priced aggressively.


On BSE, the SBI Life Insurance counter has clocked a volume of about 4.6 million shares so far in the session.


On the National Stock Exchange, the counter has clocked a volume of more than 30 million shares so far in the session.



The portion meant for qualified institutional buyers (QIBs) was oversubscribed 12.56 times, while that of non-institutional investors received 70% subscriptions and retail investors 85%, data available with the NSE showed.

At Rs 700, the valuation of SBI Life Insurance's Earnings Per Share for financial year 2016-17 worked out to about Rs 9.55 and the P/E for the year at 73.33 multiple. Price to book (PB) ratio will be 12.6 at the upper end of the price band.


The promoters of SBI Life Insurance, State Bank of India diluted up to 8 crore shares while BNP Paribas Cardif SA offloaded 4 crore shares. SBI held a 70.10% stake in the company, while BNP Paribas Cardif held 26%.


The company is the country's largest private life insurer in terms of new business premium and is a subsidiary of State Bank of India, which is among the top fifty banks in the world in terms of assets.


SBI Life Insurance saw an annual increase in its total income by nearly 20% in the four years from 2012-13, to around Rs 30,300 crore. The stock is a good one for long term and investors willing to wait patiently can consider picking it up at current levels and accumulate on dips.




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