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HDFC Standard Life’s share price have gained over 71.3% since its listing, and so far this year, it has gained 23%. Photo: Pradeep Gaur/Mint
HDFC Standard Life’s share price have gained over 71.3% since its listing, and so far this year, it has gained 23%. Photo: Pradeep Gaur/Mint

HDFC Standard Life’s market cap scales Rs1 trillion mark, falls

HDFC Standard Life's share price rose to a record high of Rs497 before ending the day 2.75% up at Rs493.90 resulting in a market cap of Rs99,472 crore

Mumbai: HDFC Standard Life Insurance Co. Ltd, India’s most profitable life insurance, on Tuesday scaled a market capitalization of Rs1 trillion on the exchanges.

At 9.40am, the HDFC Group firm saw its market capitalization 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, however, closed 2.75% up at Rs493.90 leaving the insurer with a valuation of Rs99,472 crore.

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.

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