HDFC Life March quarter: Guidance of premium growth offers confidence

HDFC Life March quarter: Guidance of premium growth offers confidence


HDFC Life declared results that were slightly better than the consensus, but in line with most expectations. It reported 17 per cent YoY growth in Annualised Premium Equivalent (APE) in FY22 to Rs 9,760 crore and 22 per cent YoY growth in Value of New Business (VNB) to Rs 2,680 crore (standalone). Net premium is Rs 45,396 crore for the FY2021-22, versus Rs 38,122 crore (2020-21). Income from investments was Rs 19,215 crore versus Rs 32,677 crore in 2020-21. The VNB margin for FY2021-22 stood at 27.4 per cent (130 bps rise YoY) versus 26.5 per cent for the first three quarters …

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First Published: Wed, April 27 2022. 20:58 IST !function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod?n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=[];t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window,document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);fbq(‘init’,’550264998751686′);fbq(‘track’,’PageView’); .

Is LIC IPO bad news for other insurance stocks?

Is LIC IPO bad news for other insurance stocks?

Next month’s mammoth stock market debut for India’s Life Insurance Corporation (LIC) has battered shares in other insurers as investors trim their holdings to make room for the state-owned giant, fund managers and analysts said.

The flotation, potentially raising $8 billion, likely will continue to drag on LIC’s competitors for about a year and could spread to other sectors, they said.

The government filed draft papers on Sunday with India’s market regulator to sell 5% of the company’s shares in what could be the world’s third-biggest insurance IPO ever and one of this year’s biggest Asian share sales, according to Refinitiv data.

“This is the biggest one and you have to make space for this,” said a fund manager who asked not to be named. “Historically, market leaders are the first ones that list. This is a rare moment when a large player is being listed very late.”

The 66-year-old company, dominating India’s insurance industry with more than 280 million policies, is the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available. It had 39.56 trillion rupees ($527 billion) of assets under management as of September.

“For any fund manager, having a player that owns over 60% of the market share instead of individually owning those that have 10%-11% market share is a very natural aspiration,” said Vidya Bala, co-founder of PrimeInvestor, a stocks and mutual funds research firm.

Fund managers have already started reducing their exposure to the three listed private life insurers, the fund manager and Bala said.

Shares in ICICI Pru have dropped 10.4% this year, while HDFC Life is down 9.7% and SBI Life 6.2%, compared with a marginal 0.2% decline in the blue-chip Nifty 50 index for the period.

LIC’s listing could dump the equivalent of nearly 60% of the three insurers’ free-float capitalisation on the market, Macquarie said in a report this week, adding that the outlook for them remains challenging.

If LIC’s valuation is attractive, the pressure could spread beyond insurers, weighing on consumer goods firms and some non-banking financial companies, two fund managers said.

“When IPOs of this big size come, they suck out the liquidity from the system,” one of the fund managers said. “If there’s room full of people at a party and a big guy comes in, you have to create space for him.”

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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